US stocks head lower; crude oil price falls again

Oil Barrels (Image: Shutterstock)

NEW YORK (AP) — Another drop in the price of oil is pulling the stock market lower on Monday. Exxon Mobil, Chevron, and other oil companies sank along with crude oil after Goldman Sachs slashed its forecast for oil prices for the next two years.

KEEPING SCORE: The Dow Jones industrial average fell 143 points, or 0.8 percent, to 17,594 as of 10:07 a.m. Eastern time.

The Standard & Poor’s 500 index fell 19 points, 0.9 percent, to 2,026, and the Nasdaq composite fell 41 points, or 0.8 percent, to 4,687.

OUCH: Tiffany & Co. cut its outlook for annual profits early Monday and also posted weaker sales in the holiday season, partially a result of a stronger U.S. dollar pinching its results. The jewelry retailer’s stock fell $11.50, or 11 percent, to $91.95.

ABROAD: In Europe, Germany’s DAX rose 0.2 percent, while France’s CAC-40 added 0.1 percent. Britain’s FTSE 100 lagged, sliding 0.6 percent.

GOLDMAN’S OIL DOWNGRADE: In a wide-ranging note to clients assessing the recent plunge in oil markets, Goldman Sachs cut its price forecasts for the coming two years. It said the benchmark New York rate would average $50.40 a barrel this year, far below its previous forecast of $83.75. It also cut its Brent forecast to $70 a barrel from $90. In response, oil prices fell further, with the New York rate down 2.4 percent at $47.20 a barrel, while Brent slid 3 percent to $48.62.

ANALYST TAKE: “I think we’re going to see plenty more volatility in the coming days as pressure mounts on oil producers to scale back production before prices get dangerously low,” said Craig Erlam, market analyst at Alpari.

THIS WEEK: Alcoa kicks off the quarterly earnings season after the closing bell on Monday. Others big names reporting this week include JPMorgan Chase, Goldman Sachs and Wells Fargo. There’s also plenty of economic news, with reports on retail sales and industrial production.

GREECE AGAIN: The Greek general election on Jan. 25 will also increasingly pre-occupy the minds of investors. Though opinion polls show the anti-bailout Syriza party on course to win the election, few think it will be able to govern without the support of other parties. Diminishing fears of a Greek exit from the euro have helped take some pressure off the country’s bond market. The yield on Greece’s 10-year government bond fell by 0.66 percentage points to 9.32 percent.

ASIA’S DAY: In China, the Shanghai Composite Index lost 1.7 percent, and Hong Kong’s Hang Seng added 0.5 percent. Seoul’s Kospi shed 0.2 percent. Benchmarks in Sydney, Taiwan, Manila and Jakarta declined while Singapore and New Zealand rose. Tokyo was closed for a public holiday.

CURRENCIES: The dollar mostly rose against other currencies. The euro fell 0.5 percent to $1.1790, near nine-year lows. The dollar fell 0.1 percent against the Japanese currency to 118.40 yen.

BONDS: U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 1.93 percent from 1.95 percent late Friday.

Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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