
Crude prices drop below $40 a barrel, making the energy sector the largest loss in the S&P 500.
Energy stocks for the overall stock market went down on Wednesday as crude oil prices in the US dipped below $40 a barrel.
The Dow Jones industrial average dropped 0.9%, or 158.67 points, to 17729.68. The S&P saw a drop of 23.12 points, more than a full percent, to 2079.51. The Nasdaq Composite saw a more moderate loss of 0.6%, or 33.08 points, to 5123.22.
The largest loss in the S&P was in the energy sector, which lost 3.1%.
Crude oil prices in the US dropped 4.6% to $39.94 a barrel, the first time it dropped below $40 since August. This was caused by data that indicated a significant increase in oil supplies, which increases a global surplus.
Wedbush Securities equities division head Ian Winer says that oil dropping below $40 a barrel is what prompted traders to sell.
The largest decline for the Dow was Exxon Mobile, which fell $2.34, almost 3%, to $79.55. This was closely followed by Chevron, which lost $2.23, 2.4%, to land at $90.25.
Energy, and particularly oil, stocks are expected to continue to fluctuate ahead of the Friday OPEC meeting, which may prove to be one of the most antagonistic in a long time.
Escalating stock prices this week resulted in slight losses in indexes in anticipation of updates on US and European monetary policies.

On Wednesday, Federal Reserve’s chairwoman Janet Yellen expressed confidence in the United States’ economy, a potential indicator that she may raise short-term interest rates.
Euro zone inflation was weaker than expected, fueling expectations that the European Central Bank may make stimulus efforts. Bank president Mario Draghi suggested the bank would act to mitigate ultraflow inflation if necessary.
Vincent Juvyns, J.P. Asset Management strategist, said, “The ECB has put itself in a corner by more or less already announcing that new measures will be taken.”
Stoxx Europe 600 Finished Almost Flat.
Potential interest rate increase in the US is thought to be an indicator of the strength of the US economy, according to Jeff Morris at Standard Life Investments. “That we can start to remove the degree of stimulus… is a positive sign broadly,” he continued.
The November US jobs report is suggesting strong job creation and could build a case for raising interest rates.
Even soft payrolls increase is not expected to dissuade the Fed from raising interest rates in December, according to Sean Lynch, Wells Fargo Investment Institute’s co-head of global equity strategy.
Assuming the Fed does begin to raise rates, it is expected to do so gradually, partly due to manufacturing sector weakness, according to Lynch, who adds that he is particularly interested in market sectors that are tied to consumers and a stronger economy.
On Tuesday, 10-year Treasury note yields increased to 2.178% from 2.155%. As yields rise prices fall.
That WSJ Dollar Index, which compares the US dollar to a select group of 16 other currencies, reached a brief 13 year high and finished the day up 0.2%.
The Wall Street Journal reports potential suitors are coming forward as Yahoo considers selling its core Internet business. Yahoo shares increased a $1.94, 5.8%, to $35.65.
Qualcomm entered into a deal with one of the largest handset makers in China, indicating the chipmaker’s difficulties in that country may be starting to ease.
In Asia, Nikkei Stock Average dropped 0.4%, while the Shanghai composite index rose 2.3% on Wednesday.