U.S. stocks retreated Wednesday as oil prices tumbled again after solid gains. The Dow Jones Industrial Average fell 117.11 points, or 0.66 percent, to 17,603.87. The S&P 500 lost 15.00 points, or 0.72 percent, to 2,063.36. The Nasdaq Composite Index decreased 42.09 points, or 0.82 percent, to 5,065.85.
In a light week of economic reports, the volatility in oil prices dominated market sentiment. Both the U.S. oil and Brent crude plunged over 3 percent Wednesday as the global supply glut continued to weigh on the market.
As it will take years to wash out the whole supply in oil market and reach the balance point where supply meets demand, many analysts do not expect oil prices will recovery soon. On the economic front, U.S. pending home sales in November declined slightly for the third time in four months as buyers continue to battle both rising home prices and limited homes available for sale, according to the National Association of Realtors.
The Pending Home Sales Index decreased 0.9 percent to 106.9 in November from an upwardly revised October reading. Overseas, European equities decreased broadly Wednesday, with French benchmark index CAC 40 going down 0.52 percent, as investors meditated on the renewed weakness in global commodity markets.
In Asia, Chinese shares erased an early loss to end slightly higher on Wednesday, with the benchmark Shanghai Composite Index gaining 0.26 percent to close at 3,572.88 points. The U.S. stock markets will be closed on Friday for New Year's Day.