Stocks sink, weighed down by another drop in price of oil

NEW YORK (AP) — Another steep drop in the price of oil weighed on global markets Tuesday. Investors remained deeply concerned about the global economy following this week's disappointing Chinese and U.S. manufacturing data. Energy stocks fell as oil giants Exxon Mobil and Chevron reported their...

NEW YORK (AP) — Another steep drop in the price of oil weighed on global markets Tuesday. Investors remained deeply concerned about the global economy following this week's disappointing Chinese and U.S. manufacturing data.

Energy stocks fell as oil giants Exxon Mobil and Chevron reported their worst quarterly results in more than a decade. In the technology sector, Google's parent company, Alphabet, overtook Apple as the world's most valuable publicly traded company.

The Dow Jones industrial average lost 295.64 points, or 1.8 percent, to 16,153.54. The Standard & Poor's 500 index fell 36.35 points, or 1.9 percent, 1,903.03 and the Nasdaq composite fell 103.42 points, or 2.2 percent, to 4,516.95.

It's a busy week on the economic data front, particularly in the U.S., where the week ends with monthly payroll figures. So far, the numbers haven't impressed. On Monday, the Institute for Supply Management said its gauge of factory activity pointed to a contraction while China's official survey found that manufacturing fell to its lowest level in more than three years.

Those reports have weighed heavily on the market, and have put investors back in a selling mood after a brief reprieve last week. U.S. government bond prices rose as investors sought safety. The yield on the 10-year Treasury note fell to 1.86 percent from 1.95 percent late Monday.

"The fear trade is alive and well and experiencing a resurgence. It's all about focusing on defensive plays right now," said Kristina Hooper, head of U.S. investment strategies for Allianz Global Investors.

The weak manufacturing reports weighed heavily on oil prices, and the selling pressure continued on Tuesday. Benchmark U.S. oil slumped $1.74, or 5.5 percent, to close at $29.88 a barrel on the New York Mercantile Exchange, a day after it plunged nearly 6 percent. Brent crude lost $1.52, or 4.4 percent, to $32.72 a barrel in London.

Energy companies, as has been the case for several weeks, followed oil prices lower. Exxon Mobil fell $1.70, or 2.2 percent, to $74.59 and Chevron fell $4.05, or 4.7 percent, to $81.24.

"Hope is extinguished for now, as the now two-day fall in crude has regained the market's focus," wrote John Briggs, head of Americas fixed income strategy at RBS, in a note to investors.

Chevron and Exxon, once the two world's largest publicly traded companies, are showing signs of stress because of the plunge in oil prices. Exxon reported its lowest profit since 2002 and also announced it was curtailing its stock buyback program. Chevron posted its first quarterly loss since 2002.

Bank stocks fell on worries that oil prices will cause more energy loans to go bad, and that the slowing economy might impact their bottom line. There's also concern that the slowing economy might put the brakes on the Federal Reserve's plans to raise interest rates, which ultimately help banks make more money by raising borrowing rates on loans.

JPMorgan Chase lost $1.83, or 3.1 percent, to $57.03, Bank of America dropped 73 cents, or 5.2 percent, to $13.23 and Citigroup fell $2.06, or 5 percent, to $40.42.

"This is a market that's not going anywhere fast. Weak China, weak oil is still with us and will be with us for a while. The market needs time to work through this, and until then, we will see more volatility, particularly because of China," said Anatasia Amoroso, a global market strategist at JPMorgan Asset Management.

In other company news, Alphabet, the recently formed parent company of Google, rose $12.65, or 1.7 percent, to $764.65 after the company's results handily beat analysts' forecasts late Monday. With Tuesday's gains, Alphabet is now the largest publicly traded company by market value, overtaking Apple.

The dollar fell to 120.04 yen from 120.12 yen. The euro strengthened to $1.0917 from $1.0895.

In other energy trading, heating oil fell 2.6 cents to $1.011 a gallon, wholesale gasoline fell 8.2 cents to $1.001 a gallon, and natural gas fell to 12.7 cents, or 6 percent, to $2.025 per thousand cubic feet.

In metals, gold fell 60 cents to $1,127.30 an ounce, silver fell five cents to $14.29 an ounce and copper was flat at $2.025 per pound.

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