Stocks slip as oil prices fall on report of hefty inventory

Stocks closed solidly lower Wednesday as U.S. crude closed below $40 a barrel for the first time since August and dragged down energy stocks.

Investors continue to weigh the implications of potential changes in interest rate policy around the world, with the European Central Bank meeting Thursday to discuss increasing its stimulus program and the Federal Reserve meeting in two weeks, where it is likely to raise rates for the first time in nine years.

At the close on Wall Street, the Dow Jones industrial average had lost 158.7 points, about 0.9 percent, to 17,729.7. The Standard & Poor’s 500 index was off 23.1 points, about 1.1 percent, to 2,079.5, and the Nasdaq composite gave up 33.1 points, about 0.6 percent, to 5,123.2.

CRUDE ENERGY: At the close benchmark U.S. crude dropped $1.91, or 4.6 percent, to $39.94 a barrel on the New York Mercantile Exchange. The Energy Department reported Wednesday that U.S. crude inventories rose by 1.2 million barrels, while analysts had expected a decline. Brent crude, which is used to price international oils, fell $1.95, or 4.4 percent, to $42.49 a barrel in London.

EUROPE STIMULUS: Investors expect the European Central Bank to expand its stimulus program when policymakers meet on Thursday, either by expanding its bond-buying or by cutting interest rates further. ECB head Mario Draghi signaled that action is coming this week as the bank seeks to support growth and push inflation higher.

U.S. INTEREST RATES: The consensus among investors is that the Fed will raise rates at its December meeting. That expectation was reinforced Wednesday, when Fed Chair Janet Yellen indicated that the U.S. economy is on track for an interest rate hike this month, although she was careful to point out that the Fed will need to review any upcoming data before making a final decision. The data Yellen is referring to includes the November jobs report, which comes out Friday.