CLOSING BELL: Oil drags stocks lower
NEW YORK — Stock indexes sank Tuesday after yet another drop in the price of oil dragged down shares across the energy industry. Other areas of the market saw modest losses as investors wait to hear from the Federal Reserve, which began a two-day policy meeting on interest rates.
The Standard & Poor's 500 index fell 8.02 points, or 0.3 percent, to 2,365.45. The Dow Jones industrial average fell 44.11, or 0.2 percent, to 20,837.37. The Nasdaq composite fell 18.97, or 0.3 percent, to 5,856.82. Two stocks fell on the New York Stock Exchange for every one that rose.
The price of oil has been slipping on concerns that supplies will outweigh demand. It's dropped from nearly $55 per barrel in late February to $47.72 on Tuesday, down 68 cents, or 1.4 percent. Brent crude, which is used to price international oils, fell 43 cents to $50.92 per barrel in London.
It's the seventh straight decline in the price of oil. Energy stocks in the S&P 500 fell 1.1 percent, the largest loss among the 11 sectors that make up the index. Marathon Oil fell 52 cents, or 3.3 percent, to $15.32.
Lower oil prices help to curb inflation, and bond yields sank in tandem. The yield on the 10-year Treasury note fell to 2.59 percent from 2.63 percent late Monday. The 30-year yield sank to 3.18 percent from 3.21 percent, while the two-year yield dipped to 1.37 percent from 1.38 percent.
Stocks of smaller companies sank more than the rest of the market. The Russell 2000 of small-cap stocks lost 0.6 percent, double the decline of the S&P 500 index of the largest stocks.
When the Fed finishes its meeting on Wednesday, most economists expect it to raise interest rates by a quarter of a percentage point. It would be only the third increase since the Fed slashed rates to a record of nearly zero in 2008 during the financial crisis.
What investors are likely more interested to hear is what Fed Chair Janet Yellen says about the pace of future increases. The job market, stock prices and other economic indicators have picked up momentum in recent months, which raises expectations for more increases.