Steep Drop In Oil Prices Weighing On Wall Street - U.S. Commentary

(RTTNews) - Stocks have come under pressure in early trading on Monday, extending the downward trend seen over the past few sessions. The major averages have slid firmly into negative territory after ending last Friday's trading roughly flat.

The major averages have seen some further downside in recent trading, hitting new lows for the young session. The Dow is down 148.22 points or 0.8 percent at 17,684.77, the Nasdaq is down 32.24 points or 0.7 percent at 4,694.57 and the S&P 500 is down 18.68 points or 0.9 percent at 2,039.52.

The early weakness on Wall Street is partly due to a sharp drop by the price of crude oil, which has fallen to a new five-year low.

Crude oil for February delivery is currently tumbling $2.02 to $50.67 a barrel after plunging $2.04 or 3.7 percent to $52.69 a barrel last week.

While recent data has suggested that the drop in gasoline prices will boost consumer spending in other areas, traders seen concerned about the economic impact of a slowdown by the oil and gas industry.

Energy stocks are subsequently turning in some of the market's worst performances on the day. Reflecting the weakness in the sector, the NYSE Arca Oil & Gas Index and the Philadelphia Oil Service Index are plummeting by 3.2 percent and 3 percent, respectively.

Significant weakness has also emerged among trucking stocks, as reflected by the 1.9 percent loss being posted by the Dow Jones Trucking Index. The index is pulling back further off the record closing high it set on Christmas Eve.

Steel, railroad, banking, and chemical stocks are also seeing early weakness, while gold stocks are bucking the downtrend amid an increase by the price of the precious metal.

Among individual stocks, shares of Ford (F) have come under pressure in early trading after the auto giant reported disappointing December sales.

Construction equipment maker Caterpillar (CAT) is also posted a notable loss after JP Morgan downgraded its rating on the company's stock to Underweight from Neutral.

On the other hand, shares of Cempra (CEMP) have moved sharply higher after the pharmaceutical company reported positive results from a late-stage clinical trial of a treatment for a common type of pneumonia.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index dipped by 0.2 percent, while China's Shanghai Composite Index surged up by 3.6 percent.

Meanwhile, the major European markets have all moved sharply lower on the day. While the U.K.'s FTSE 100 Index has fallen by 1.3 percent, the German DAX Index and the French CAC 40 Index are down by 2.2 percent and 2.5 percent, respectively.

In the bond market, treasuries are moving notably higher amid the continued weakness on Wall Street. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.7 basis points at 2.086 percent.