Oil prices drag down shares
Stock indexes sank after yet another drop in the price of oil dragged down shares across the energy industry.
Other areas of the market saw modest losses as investors wait to hear from the Federal Reserve, which began a two-day policy meeting on interest rates.
The Standard & Poor's 500 index fell 8.02 points, or 0.3%, to 2,365.45. The Dow Jones industrial average fell 44.11, or 0.2%, to 20,837.37. The Nasdaq composite fell 18.97, or 0.3%, to 5,856.82. Two stocks fell on the New York Stock Exchange for every one that rose.
The price of oil has been slipping on concerns that supplies will outweigh demand. It's dropped from nearly 55 dollars per barrel in late February to 47.72 dollars on Tuesday, down 68 cents, or 1.4%. Brent crude, which is used to price international oils, fell 43 cents to 50.92 dollars per barrel in London.
It's the seventh straight decline in the price of oil. Energy stocks in the S&P 500 fell 1.1%, the largest loss among the 11 sectors that make up the index. Marathon Oil fell 52 cents, or 3.3%, to 15.32 dollars.
Lower oil prices help to curb inflation, and bond yields sank in tandem. The yield on the 10-year Treasury note fell to 2.59% from 2.63% late on Monday. The 30-year yield sank to 3.18% from 3.21%, while the two-year yield dipped to 1.37% from 1.38%.
Stocks of smaller companies sank more than the rest of the market. The Russell 2000 of small-cap stocks lost 0.6%, double the decline of the S&P 500 index of the largest stocks.
When the Fed finishes its meeting on Wednesday, most economists expect it to raise interest rates by a quarter of a percentage point. It would be only the third increase since the Fed slashed rates to a record of nearly zero in 2008 during the financial crisis.
What investors are likely more interested to hear is what Fed Chair Janet Yellen says about the pace of future increases. The job market, stock prices and other economic indicators have picked up momentum in recent months, which raises expectations for more increases.
Airline stocks had some of the market's biggest losses after the industry cancelled thousands of flights in the face of fierce snowstorms. United Continental fell 3.30 dollars, or 4.7%, to 66.55 dollars, while rival Southwest Airlines lost 1.61 dollars, or 3%, to 52.88 dollars and American Airlines Group dropped 1.16 dollars, or 2.7%, to 41.21 dollars.
Valeant Pharmaceuticals fell 1.22 dollars, or 10.1%, to 10.89 dollars after one of its biggest investors sold its entire stake in the company. Valeant's stock has tumbled nearly 96% since its peak in the summer of 2015 because the company is facing more scrutiny for raising prices on its drugs. Activist investor Bill Ackman's Pershing Square said it has sold its investment Valeant.
In the currency market, the British pound fell against the dollar after Parliament gave its prime minister the authority to divorce Britain from the European Union. Scotland's first minister, meanwhile, called for a referendum to break free of the United Kingdom.
The pound fell to 1.2145 dollars from 1.2231 dollars late Monday. The euro fell to 1.0632 dollars from 1.0660 dollars, and the dollar dipped to 114.72 Japanese yen from 114.77 yen.
In commodity trading, gold fell 50 cents to settle at 1,202.60 dollars an ounce, silver fell 5 cents to 16.92 dollars an ounce and copper rose 1 cent to 2.64 dollars a pound. Wholesale gasoline was little changed at 1.58 dollars a gallon, heating oil fell 1 cent to 1.49 dollars a gallon and natural gas fell 11 cents to 2.94 dollars per 1,000 cubic feet.
In Europe, Germany's DAX stock index was close to flat, while the U.K.'s FTSE 100 slipped 0.1% and the French CAC 40 lost 0.4%. In Asia, Japan's Nikkei 225 stock index dipped 0.1%, South Korea's Kospi rose 0.8% and the Hang Seng in Honk Kong was close to flat.