Stocks slump the most in two months on Wall Street

Published on NewsOK Modified: January 13, 2014 at 3:38 pm •  Published: January 13, 2014
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NEW YORK (AP) — The stock market had its worst day of the year so far, extending a January slump.

Stocks dropped Monday as falling oil prices pushed down energy stocks. The prospect of the Federal Reserve further cutting back on its economic stimulus also weighed on the market.

Stocks are falling back this year after exceptional gains pushed the market to record levels in 2013. Investors' confidence that the economy was recovering was jolted Friday by a weak employment report that showed far fewer jobs were added in December than economists had forecast.

Unlike last year, investors have so far been reluctant to buy stocks when the market has slumped. Instead they appear to be waiting for more news before committing, said Peter Cardillo, chief market economist at Rockwell Global Capital.

"At these high levels, people aren't going to step in" until they get more evidence of earnings growth or better economic news, Cardillo said. "Until that happens, who's going to step up to the plate?"

The Standard & Poor's 500 index dropped 23.17 points, or 1.3 percent, to 1,819.20, the biggest decline for the index since Nov. 7. After surging almost 30 percent last year, the S&P 500 index is down 1.6 percent in January.

The Dow Jones industrial average fell 179.11 points, or 1.1 percent, to 16,257.94. The Nasdaq composite dropped 61.36 points, or 1.5 percent, to 4,113.30.

All 10 sectors in the S&P 500 fell.

Energy stocks were among the biggest decliners, dropping 1.9 percent after the price of oil slumped close to its lowest in eight months. Exxon Mobil fell $1.97, or 2 percent, to $98.55.

Oil fell 92 cents, or 1 percent, to $91.80 a barrel as Libyan production continued to ramp up and the possibility of increased crude exports from Iran raised the prospects of excess supply on global markets.

Investors are also worried about more cuts to the Federal Reserve's big economic stimulus program.

Dennis Lockhart, the President of the Federal Reserve's Atlanta branch, said Monday that he would support further cuts "over the course of this year" if the economy continued to improve. Policymakers said in December that they intended to reduce their purchases of bonds by $10 billion a month to $75 billion a month. The Fed's stimulus was a key driver of the market's rally last year.