U.S. stocks extend losses as oil keeps sliding

U.S. stocks closed lower on Tuesday, as weak commodities prices continued to weigh on market.

The Dow Jones Industrial Average dropped 162.51 points, or 0.92 percent, to 17,588.00. The S&P 500 lost 13.48 points, or 0.65 percent, to 2,063.59. The Nasdaq Composite Index shed 3.57 points, or 0.07 percent, to 5,098.24.

Oil prices extended losses Tuesday as the market expected that global supplies will continue to exceed demand. The West Texas Intermediate for January delivery shed about 0.4 percent, while Brent crude for January delivery dropped over 1 percent. The declining crude prices knocked down shares of major oil companies.

Oil prices closed near seven-year lows Monday after the decision of the Organization of the Petroleum Exporting Countries (OPEC) Friday to keep crude production pumping at current level in an already oversupplied market.

"Crude oil fell to a new 7-year low yesterday, proving once again 'temporary' and 'transitory' can take longer to play out than anyone anticipates," said Chris Low, chief economist at FTN Financial Tuesday.

In Asia markets, Tokyo shares fell as concerns over plunging oil prices in the global market shadowed the buoyant sentiment brought by positive revised Japan's July-September gross domestic product data. China's stocks also closed lower on Tuesday, with the benchmark Shanghai Composite Index down 1.89 percent to 3,470.07 points.

The CBOE Volatility Index, often referred to as Wall Street's fear gauge, rose 11.11 percent to end at 17.60 on Tuesday. In other markets, the U.S. dollar traded mixed against other major currencies after a sharp rise in the previous session.

In late New York trading, the euro climbed to 1.0886 dollars from 1.0846 dollars in the previous session, while the dollar bought 123.06 Japanese yen, lower than 123.28 yen of the previous session.

Gold futures on the COMEX division of the New York Mercantile Exchange edged up as the U.S. dollar weakened and traders with short trades covered their position. The most active gold contract for February delivery inched up 0. 1 dollar, or 0.01 percent, to settle at 1,075.30 dollars per ounce.