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Stocks slide on energy sector selloff

Traders work on the floor of the

Traders work on the floor of the New York Stock Exchange on Wall Street on March 7, 2016. Credit: Getty Images / Spencer Platt

A selloff in energy shares dragged the stock market down Tuesday, after worsening economic data from Asia reignited investors’ concern over the outlook for global growth.

At the close on Wall Street, the Dow Jones industrial average was down 109.9 points, about 0.6 percent, at 16,964.1. The Standard & Poor’s 500 index was off 22.5 points, about 1.1 percent, at 1,979.3. The Nasdaq composite gave up 59.4 points, about 1.3 percent, to close at 4,648.8.

CRUDE FIGURES: About the same time, the price of U.S. benchmark crude oil was down $1.66, about 4.4 percent, at $36.24 a barrel on the New York Mercantile Exchange. In London, the price of the international benchmark, Brent crude, lost $1.41 cents, about 3.6 percent, to $39.43 a barrel.

WHAT’S GOING ON: Energy producers in the benchmark have surged 14 percent during the past three weeks, while financial, raw-material and consumer discretionary shares have gained at least 11 percent to bolster the rally. Monday showed signs that momentum is slowing as banks fell for the first time in five days, while technology stocks and retailers also retreated.

ANALYST’S OPINION: “After three weeks of gains, we’re getting a bit of profit-taking triggered by the not-so-nice economic figures out of Asia,” analyst Heinz-Gerd Sonnenschein told Bloomberg News. “It’s also a question of pausing and waiting to hear from Draghi this week and the Fed soon after.” Sonnenschein is a strategist at Deutsche Postbank AG in Bonn, Germany.

LOOKING AHEAD: Investors are looking to Thursday’s European Central Bank policy update, and next week’s Federal Reserve gathering for indications of future interest rates. Bloomberg News reported that traders are pricing in a less than 1-in-10 chance the Fed will raise borrowing costs this month. Odds for a September move have risen to about 57 percent from less than 35 percent two weeks ago, though the probability slipped from 59 percent yesterday following the data from China and Japan.

With Bloomberg News and The Associated Press

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