S&P 500, Nasdaq Slip; Falling Oil Prices Weigh on Energy

New York: The S&P 500 and Nasdaq ended lower on Tuesday as another big drop in oil prices dragged down energy shares and Priceline's earnings forecast disappointed.

The S&P 500 energy sector fell 1.9 per cent, extending the group's recent drop, the Energy Select Sector SPDR ETF dropped 2.1 per cent, and Chevron Corp eased 1.2 per cent to $115.37.

The Dow ended slightly higher, although it was unable to break through Friday's record close. While the market has bounced back strongly from its recent selloff, the energy sector remains under pressure from plunging oil prices.

The price of US crude oil hit its lowest in three years after Saudi Arabia cut sales prices to the United States. Crude settled down $1.59 at $77.19 after reaching the lowest intraday price since October 2011 in the morning.

Adding to worries about global demand, the European Commission said the euro zone will need another year to reach even modest economic growth. A Reuters report said central bankers in the euro zone plan to challenge European Central Bank President Mario Draghi's leadership style.

"Eventually, a slowdown in Europe could affect large US companies. So far, we have not seen much influence, at least in earnings reports. Next quarter could really be indicative of whether a slowdown in Europe is actually having an effect here," said Bryant Evans, portfolio manager at Cozad Asset Management in Champaign, Illinois.

Among other top negative influences, Priceline Group Inc shares dropped 8.4 per cent to $1,097.70, one of the largest percentage decliners on the S&P 500 and Nasdaq, after it forecast quarterly earnings below Wall Street's expectations.

The Dow Jones industrial average rose 17.6 points, or 0.1 per cent, to 17,383.84, the S&P 500 lost 5.71 points, or 0.28 per cent, to 2,012.1 and the Nasdaq Composite dropped 15.27 points, or 0.33 per cent, to 4,623.64.

The Dow Jones transportation average rose 0.4 per cent and posted another record high close.

The session closed with all eyes on today's US elections, where a handful of Senate races could hold the key to whether the stock market glides through the year-end in a typical post-midterm election rally or gets hit with a fresh bout of volatility.

Alibaba Group Holding Ltd rose 4.3 per cent to $106.07 on massive volume after the Chinese e-commerce company reported its first quarterly results as a public company, posting revenue growth of 53.7 per cent.

The company is one of the largest in the world, but its rise did not directly translate to major indexes as it is not a component of the Dow or S&P 500 and is not traded on the Nasdaq.

Among the day's other big decliners, Regeneron Pharmaceuticals Inc lost 5.8 per cent to $372.39 after it cut the top end of its full-year sales outlook for its blockbuster eye drug. But the company also said it is consulting with government agencies to see if its technology might be used to fight Ebola.

After the bell, shares of TripAdvisor dropped 13.9 per cent to $72.08 following the release of its results.

During the regular session, about 7 billion shares changed hands on US exchanges, compared with the 7.3 billion average for the last five sessions, according to data from BATS Global Markets.

Declining issues outnumbered advancing ones on the NYSE by 1,837 to 1,231, for a 1.49-to-1 ratio on the downside. On the Nasdaq, 1,530 issues fell and 1,148 advanced for a 1.33-to-1 ratio favoring decliners.

Copyright: Thomson Reuters 2014