NEW YORK — Stocks sank Wednesday as a sharp drop in the price of oil dragged down energy companies. U.S. crude closed below $40 a barrel for the first time since August.
Investors continue to weigh the implications of potential changes in interest rate policy around the world. The European Central Bank meets Thursday to discuss increasing its stimulus program, and the Federal Reserve is likely to raise rates for the first time in nine years at its next policy meeting in mid-December.
The Dow Jones industrial average fell 158.67 points, or 0.9 percent, to 17,729.68. The Standard & Poor’s 500 index fell 23.12 points, or 1.1 percent, to 2,079.51, and the Nasdaq composite lost 33.08 points, or 0.6 percent, to 5,123.22.
Oil and gas stocks fell far more than the rest of the market. Energy stocks in the S&P 500 sank 3.1 percent compared with a 1.1 percent decline in the broader market.
The price of oil was lower all day, and the losses accelerated in the afternoon after the Energy Department reported that U.S. crude inventories rose by 1.2 million barrels last week, while analysts had expected a decline.
Benchmark U.S. crude dropped $1.91, or 4.6 percent, to $39.94 a barrel on the New York Mercantile Exchange. Brent crude, which is used to price international oils, fell $1.95, or 4.4 percent, to $42.49 a barrel in London.
Exxon Mobil fell $2.34, or 3 percent, to $79.55, Chevron lost $2.33, or 2.5 percent, to $90.25 and drilling rig operator Transocean fell 37 cents, or 2.6 percent, to $13.83.
Outside the drop in oil prices, and its impact on energy companies, investors remain focused on what the world’s central banks plan to do at their upcoming policy meetings.
Unless the November employment figures are extraordinarily weak, investors believe the Fed will raise interest rates this month, from record low levels, for the first time since the financial crisis. The payroll processor ADP said the private sector created 217,000 jobs in November.
