Stocks Tumble as Weaker Forecast Sends Oil Prices Lower

Traders work on the floor of the New York Stock Exchange on Tuesday. (Reuters/Brendan McDermid)
Traders work on the floor of the New York Stock Exchange on Tuesday. (Reuters/Brendan McDermid)

U.S. stocks are skidding Tuesday as investors worry that the global economy will grow at a slower rate, which would hurt a wide swath of businesses. The International Energy Agency said it expects slower growth in demand for oil this year. That’s pushing the price of oil down and sending energy companies lower. Banks and phone companies are also falling.

KEEPING SCORE: The Dow Jones Industrial Average gave up 243 points, or 1.3 percent, to 18,082 as of 1:15 p.m. Eastern time. The Standard & Poor’s 500 index fell 32 points, or 1.5 percent, to 2,127. The Nasdaq composite lost 65 points, or 1.2 percent, to 5,147. After two months of quiet trading, stocks are on track for their third big move in a row, after a steep drop Friday and a rally on Monday.

OIL: Crude prices fell Tuesday after the Paris-based International Energy Agency said it believes global demand for oil will grow by 1.3 million barrels a day in 2016. That’s 100,000 barrels below the previous forecast. The biggest reason for the change is a more pronounced economic slowdown during the third quarter of the year.

Slower economic growth has been a major worry for investors this year. It was a big reason stocks tumbled in January and early February. The price of oil has plunged over the last two years as an enormous supply glut built up while growth in demand slowed.

U.S. crude fell 98 cents, or 2.1 percent, to $45.31 a barrel in New York. Brent crude, the benchmark for international oil prices, slid 83 cents, or 1.7 percent, to $47.50 a barrel in London.

Exxon Mobil sank $1.99, or 2.3 percent, to $85.30 while Chevron shed $2.53, or 2.5 percent, to $99.72 and Marathon Oil stumbled $1.18, or 7.6 percent, to $14.29.

GOING DEEP: Anadarko Petroleum agreed to pay $2 billion to buy Freeport-McMoRan’s deepwater assets in the Gulf of Mexico. The move comes a little more than a year after activist investor Carl Icahn disclosed that he bought a stake in Freeport-McMoRan. Two directors backed by Icahn are now on the company’s board, and he has pushed Freeport-McMoRan to spin off its oil and gas business so it can focus on copper mining. Anadarko stock sank 45 cents to $57.34 and Freeport-McMoRan fell $1.02, or 9.2 percent, to $10.06.

BONDS: U.S. government bond prices slipped. The yield on the 10-year Treasury note rose to 1.74 percent from 1.67 percent. The yield on the 30-year Treasury bond also jumped. The yields on both are at their highest levels since late June, right before Britain voted to leave the European Union.

DECLINERS: Only eight stocks in the S&P 500 index traded higher. Some of the largest losses went to banks and phone companies. Wells Fargo lost $1.84, or 3.8 percent, to $46.70 and Goldman Sachs dipped $3.95, or 2.3 percent, to $167.11. Phone companies also sank as higher bond yields make them less appealing. Verizon shed $1.31, or 2.5 percent, to $51.26 and AT&T fell 85 cents, or 2.1 percent, to $39.86.

CHIP CHIP, HOORAY: Among the few gainers was chipmaker Intersil, which agreed to be bought by Renesas of Japan. Renesas’ offer values Intersil at $22.50 per share, or $3.05 billion. Intersil climbed $1.98, or 10 percent, to $21.74.

SLIMMING DOWN: Weight Watchers International slumped 81 cents, or 7.8 percent, to $9.55 after the weight loss company said CEO James Chambers will step down at the end of the month. Chambers has been its CEO since 2013. Weight Watchers more than doubled after the company announced an alliance with Oprah Winfrey, who has touted the company’s products, bought a 10 percent stake, and joined the board of directors. But the stock has given up some of its gains lately. Weight Watchers said Winfrey will be part of the committee that names its next CEO.

READY TO LINE UP? Of the 30 stocks on the Dow Jones industrial average, only Apple traded higher. It rose $2.52, or 2.4 percent, to $107.96 after T-Mobile said preorders for Apple’s newest iPhones, introduced last week, are the strongest it has seen so far.

CURRENCIES: The dollar rose to 102.31 yen from 101.84 yen. The euro fell to $1.1228 from $1.1241.

OVERSEAS: Germany’s DAX lost 0.4 percent while France’s CAC-40 slipped 1.2 percent. The FTSE 100 index of leading British shares was down 0.5 percent. Asian stocks mostly rallied. In Japan the Nikkei 225 gained 0.3 percent and South Korea’s Kospi rose 0.4 percent. However, the Hang Seng index in Hong Kong lost 0.3 percent.

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