US stocks retreat as oil plunges

New York, Jan 26 (IANS) US stocks suffered big losses on Monday, as a renewed decline in oil prices weighed on Wall Street ahead of the Federal Reserve’s monetary policy meeting.

The Dow Jones Industrial Average lost 208.29 points, or 1.29 percent, to 15,885.22. The S&P 500 dropped 29.82 points, or 1.56 percent, to 1,877.08. The Nasdaq Composite Index shed 72.69 points, or 1.58 percent, to 4,518.49.
With no major economic data due out on Monday, oil prices were still in focus, which had witnessed wild swings recently.
Oil prices tumbled over 5 percent on profit taking Monday after Friday’s surge, as Iraq announced record-high oil production.
Oil prices skyrocketed last week for about 10 percent on the hope that stimulus from Eurozone and frigid weather across the United States will lift the demand.
As it will take years to wash out the whole supply in oil market and reach the balance point where supply meets demand, many analysts do not expect oil prices would recovery soon.
Investors also kept a close eye on the US central bank, which will start its two-day meeting on Tuesday and will release a statement after the conclusion on Wednesday.
Analysts expect that the Fed not to take any rate action at this meeting amid oil weakness.
In corporate news, shares of McDonald’s rose 0.68 percent to $119.20 apiece on Monday, after the fast-food chain delivered better-than-expected earnings for the fourth quarter of 2015.
Latest data from Thomson Reuters showed that the S&P 500 companies’ blended earnings in the fourth quarter of 2015 are expected to decrease 4.5 percent year on year, while the revenue is forecast to decline 3.6 percent.
Overseas, European equities ended lower amid falling oil prices on Monday, with British benchmark FTSE 100 Index decreasing 0.39 percent.
In Asia, Chinese benchmark Shanghai Composite Index gained 0.75 percent to close at 2,938.51 points, while Japanese benchmark 225- issue Nikkei Stock Average added 0.90 percent to end at 17,110.91 points.
On Friday, US stocks posted their first weekly gains of the new year, with the Dow, the S&P 500 and the Nasdaq going up 0.7 percent, 1.4 percent and 2.3 percent respectively, as further recovery in oil prices boosted investor sentiment.