Signs of weakness in China sink materials stocks

NEW YORK - U.S. stocks fell for a second day Tuesday, after a wave of selling abroad on fears that a slump in commodity prices was far from over.

The selling began in Asia on disappointing trade figures from China, then spread to Europe, where stock indexes in Germany, France, and Britain each dropped more than 1 percent.

On Wall Street, the selling was broad, with nine of the 10 sectors of the Standard and Poor's 500 index closing down. Suppliers of raw materials fell the most, 1.9 percent. Energy companies dropped 1.5 percent.

The Dow Jones industrial average lost 162.51 points, or 0.9 percent, to close at 17,568. The Nasdaq composite slipped 3.6 points, or 0.1 percent, to 5,098.24. The S&P 500 gave up 13.48 points, or 0.7 percent, to 2,063.59.

Oil prices, a big focus for investors, slid again Tuesday. After dropping for 11/2 years, U.S. benchmark crude closed at just $37.51 a barrel, near a seven-year low, down 14 cents or 0.4 percent from Monday's closing price on the New York Mercantile Exchange.

"The energy sector has done a good job grappling with mid-$40s oil, but it's tougher as you go under $40," said Doug Cote, chief market strategist at Voya Investment Management. "The energy sector is having trouble adapting."

Brent crude, the international benchmark, lost 47 cents, or 1.2 percent, to close at $40.26 a barrel in London.

In Asia, Chinese customs data showed exports from the world's second-largest economy contracted 6.8 percent in November, worse than October's 3.6 percent fall. Imports dropped 8.7 percent.

Mining stocks in particular were slammed because China is a major importer of raw materials, accounting for as much as 50 percent of global demand, according to consultants PwC. Mine operator Freeport-McMoRan slumped 49 cents, or 7 percent, to $6.74; its price is down 71 percent this year.

John Manley, chief stock strategist at Wells Fargo Funds, said raw-material suppliers ramped up production too much a few years ago as China stoked its economy after the global financial crisis.

"It surprised producers that China was soaking up so much," he said. "As China slows and shifts to more consumer growth, these producers have been hit."

In metals trading, iron ore, off 43 percent since 2015's start, fell 15 cents, to $39.25 a metric ton. Copper inched up less than a penny to $2.05 a pound. Gold edged up 10 cents to $1,075.30 an ounce. Silver fell 22 cents to $14.12 an ounce.

In fuel-futures trading, wholesale gasoline fell 0.6 cents to $1.204 a gallon, heating oil slipped 2 cents to $1.259 a gallon, and natural gas edged up 0.3 cent to $2.07 per 1,000 cubic feet.