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Stocks slump on another decline in oil prices

A Wall Street sign near the New York

A Wall Street sign near the New York Stock Exchange in Manhattan on July 6, 2015. Credit: AP / Mark Lennihan

Stocks fell on Monday, led by a slumping energy sector as the price of oil continued to fall. Reports from the United States and China indicate weakening factory sectors with reduced need for fuel.

At the close on Wall Street, The Standard & Poor's 500 index was down 5.8 points, about 0.3 percent, at 2,098. The Dow Jones industrial average lost 91.7 points, about 0.5 percent, to 17,598.2. The Nasdaq composite gave up 12.9 points, about 0.3 percent, to 5,115.4.

ENERGY: As markets closed, benchmark U.S. crude had shed $1.79 to $45.74 a barrel on the New York Mercantile Exchange, near its lowest price in more than four months. The price of oil slumped 21 percent in July on evidence of a global supply glut and the possibility that global demand may weaken.

THE QUOTE: The big slump in oil has pushed down gas prices, putting more money in consumer's pockets. That hasn't led to a pickup in spending yet, suggesting that consumers are saving the extra cash rather than spending it. That has surprised investors. "There was this expectation that [the fall in oil prices] would translate into other areas, such as stronger consumer spending, and stronger [company] earnings," said analyst Jennifer Ellison, a principal at San Francisco-based investment firm Bingham, Osborn & Scarborough. "But we're really not seeing the consumer spend the way that was anticipated."

MANUFACTURING: U.S. factories were a little less busy last month. The Institute of Purchasing Managers' manufacturing index slipped to 52.7 last month from 53.5 in June. Economists had expected the index to remain unchanged. Any reading above 50 indicates growth. In the past week reports from China have indicated its factories are slowing down.


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