U.S. stocks have opened the first full week of 2015 with a steep decline, with the Dow Jones industrial average dropping 331 points, as falling oil prices weighed on the energy sector.
Oil prices continued their months-long decline Monday, with the price of crude briefly falling below $50 per barrel for the first time in more than five years earlier in the session on account of global oversupply. Concerns over the worldwide oil glut heightened in the past week as both Russia and Iraq posted record oil supplies. Energy companies have suffered as a result of the falling oil prices and industry stocks were hit hard again to start the week.
Chevron was recently down more than 4% in early trading — a drop that knocks roughly $8 billion off the energy giant’s market cap. Meanwhile, Exxon Mobil fell more than 3% this morning and BP dropped almost 6%. Oil field services company Halliburton has suffered as well and was also recently down nearly 3%.
The energy industry losses caused the broader U.S. market to slump, with the Dow Jones industrial average lately down more than 240 points, or about 1.4%. The blue-chip index has dropped about 17,600 points in almost two weeks after crossing the 18,000-point mark for the first time in history late last year.
The broader S&P 500 index was lately down 1.3%, while the Nasdaq composite fell about 1%. The Nasdaq is down a little more than 1% so far in 2015, while both the Dow Jones and the S&P 500 have dropped around 1.3% since the start of the year. All three indices finished 2014 on a fairly strong note, with the Dow Jones gaining 7.5% on the year, while the S&P 500 improved by almost 12% and the Nasdaq gained more than 13%.
Another potential factor in the day’s market drop was news of more troubles in Europe. The euro fell to its lowest level against the dollar in nine years Monday, driven by fears of political turmoil in Greece and hopes for more monetary stimulus from the European Central Bank.