Steep Drop In Oil Prices Leads To Sell-Off On Wall Street

(RTTNews) - Stocks moved sharply lower over the course of the trading day on Wednesday after ending the previous session mixed. With the losses on the day, the Dow and the S&P 500 pulled back further off last Friday's record closing highs.

A steep drop by the price of crude oil once again contributed to the weakness on Wall Street, with energy stocks leading the markets low.

Crude for January delivery tumbled $2.88 to $60.94 a barrel, more than offsetting the increase seen in the previous session to hit its lowest closing level in over five years.

The sharp pullback by the price of crude oil came after OPEC said it expects demand for crude next year to be the lowest since 2003. A report showing an increase in U.S. crude inventories also weighed on oil prices.

Reflecting the subsequent weakness in the energy sector, the Philadelphia Oil Service Index, the NYSE Arca Oil & Gas Index, and the NYSE Arca Natural Gas Index all plummeted by more than 3 percent.

Most of the other major sectors also came under pressure on the day, with notable weakness visible among steel, gold, housing, and chemical stocks.

The broad based sell-off may partly reflect concerns about how the sharp drop in oil prices will affect the U.S. economy as a whole.

While lower gas prices may boost consumer spending in other areas, the drop in prices will hurt the oil and gas industry, which had been a major source of growth.

The major averages ended the session firmly in negative territory, near their worst levels of the day. The Dow plunged 268.05 points or 1.5 percent to 17,533.15, the Nasdaq tumbled 82.44 points or 1.7 percent to 4,684.03 and the S&P 500 plummeted 33.68 points or 1.6 percent to 2,026.14.