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 U.S. crude stockpiles increased unexpectedly.
The West Texas Intermediate for February delivery moved down 1. 27 U.S. dollars to settle at 36.6 dollars a barrel on the New York Mercantile Exchange, while Brent crude for February delivery decreased 1.33 dollars to close at 36.46 dollars a barrel on the London ICE Futures Exchange.
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. The CBOE Volatility Index, often referred to as Wall Street's fear gauge, rose 7.52 percent to end at 17.29 Wednesday. In other markets, the U.S. dollar gained against most major currencies Wednesday amid thin trading in holiday season. In late New York trading, the euro moved down to 1.0924 dollars from 1.0939 dollars in the previous session.
The dollar bought 120. 54 Japanese yen, higher than 120.38 yen of the previous session. Gold futures on the COMEX division of the New York Mercantile Exchange fell on Wednesday as the U.S. dollar showed strength. The most active gold contract for February delivery lost 8.2 dollars, or 0.77 percent, to settle at 1,059.80 dollars per ounce.
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