BUSINESS

Oil and commodities prices fall, driving down stocks

Stocks fell broadly Tuesday as commodity prices retreated. Crude oil sank more than 4%. Investors remained worried about growth in China as the country cut the value of its currency against the dollar yet again.

Investors were also discouraged by a report showing that consumer confidence fell to its lowest level in seven months.

The Dow Jones industrial average fell 188.88 points, or 1.1%, to 16,431.78. The Standard & Poor's 500 index slid 24.23 points, or 1.3%, to 1,921.27 and the Nasdaq composite dropped 67.02 points, or 1.5%, to 4,503.58.

As has happened multiple times this year, stocks fell in tandem with energy prices.

Saudi Arabia's oil minister said Tuesday that any production cuts would not boost oil prices, and that the world's oil market should be allowed to work even if that forces some operators out of business. He also said he expects oil prices to remain low for some time.

Crude oil fell $1.52, or 4.6%, to $31.87 a barrel, and Brent crude, which is used to price oils internationally, fell $1.42, or 4.1%, to $33.27 a barrel.

Energy stocks fell far more than the rest of the market, with the energy component of the S&P 500 dropping 3.2%.

It's not uncommon to see stocks give up some of their gains after a strong multi-day like the one that happened last week, but traders said the mood in the market is still cautious. They noted that trading volume has been far lighter on days the market has risen and heavier on days it has fallen. That suggests there is more interest among investors in getting out of stocks than there is in getting into them.

“We aren't seeing the buying interest that you would usually see in a major upward swing in the markets,” said Ryan Larson, head of U.S. equity trading at RBC Global Asset Management. “Although we have come off the bottom, it's still quite volatile out there.”

Investors were also still watching developments out of China, where the People's Bank of China announced it had cut its daily rate between the yuan and the dollar more than expected. The weakening yuan was a major cause of market turmoil last August as investors worried that it signaled a slowdown in China's economy.

Also on Tuesday, a report from the Conference Board showed U.S. consumer confidence fell to 92.2 in February, down sharply from a reading of 97.8 in January and the lowest level since July. Consumers expressed worries about deteriorating business conditions and turbulence in the financial markets.

Among individual companies, Fitbit, a maker of wearable fitness trackers, dived $3.44, or 21%, to $13.08 after the company issued a weak forecast for 2016.

Dow member United Technologies slid 77 cents, or 1%, to $91.60 after the company rejected a merger offer from Honeywell.

U.S. government bond prices rose. The yield on the 10-year Treasury note edged down to 1.72% from 1.75% a day earlier. The dollar fell to 112.06 yen from 112.83 yen, and the euro weakened to $1.1009 from $1.1026.

In other energy prices, heating oil fell 3.3 cents to $1.022 a gallon, wholesale gasoline fell 3.4 cents to 96.6 cents a gallon, and natural gas fell 3.9 cents to $1.782 per 1,000 cubic feet.

Precious and industrial metals futures ended mixed. Gold rose $12.50 to $1,222.60 an ounce, silver rose six cents to $15.24 an ounce, and copper slipped a penny to $2.11 a pound.

Copyright © 2016, Los Angeles Times

UPDATES

3:06 p.m.: This article was updated with closing prices and additional information. 

7:43 a.m.: This article was updated with more recent prices and additional information. 

This article was originally published at 6:52 a.m.

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