U.S. stocks dropped Monday, with the Dow Jones Industrial Average tumbling more than 200 points, after the price of oil tumbled to its lowest level since 2009. Brent crude, the global benchmark for oil prices, dropped below $55 a barrel for first time in more than five and a half years.
The Dow Jones Industrial Average, which measures the share prices of 30 large industrial companies, dropped 259.26 points, or 1.45 percent, at 17,573.73; the S&P 500 stock index lost 30.42, or 1.47 percent, at 2,027.90. The tech-heavy Nasdaq Composite fell 51.33 points, or 1.10 percent, to 4,674.96.
While declining global oil prices weighed on financial markets Monday, U.S. crude fell to a session low of $50.55 a barrel, its lowest price since May 2009. Three factors are on analysts’ radars as 2015 opens: the U.S. shale revolution, the Saudi refusal to cede market share to other producers and a weak world economy, according to Edward L. Morse, managing director and the head of global commodities research at Citigroup. Citi expects Brent to average $63 a barrel in 2015, with “significant market weakness” into the second quarter followed by increasing market strength from the third quarter into year-end, Morse said in a note to clients Sunday.
Brent crude dropped 3.49 percent Monday, to $54.45 a barrel, for Feb. 15 delivery on the London ICE Futures Exchange. West Texas Intermediate crude, the benchmark for U.S. oil prices, fell 3.07 percent Monday, to $51.07 per barrel, for Feb. 15 delivery on the New York Mercantile Exchange.
Ahead on the economic calendar, investors will be eyeing motor vehicle sales for December throughout the day from major auto giants such as General Motors Company, Ford Motor Company and Fiat Chrysler. GM and Ford saw U.S. sales climb last month, as December sales rose 19 percent, to 274,483, and 1.2 percent, to 220,671, respectively.