U.S. stocks showed poise Tuesday, with afternoon trading erasing much of the morning’s losses brought on by a sharp decline in oil prices following Saudi Arabia’s surprise price cut.
The Dow Jones Industrial Average rose 17.6 points, or 0.10 percent, to close at 17,383.84.
The Standard & Poor’s 500 index declined 5.71 points, or 0.28 percent, to close at 2,012.10. The NASDAQ Composite Index declined 15.27 points, or 0.33 percent, to close at 4,623.64.
West Texas Intermediate crude oil for December delivery dropped to $77.19 per barrel, but traded Tuesday as low as $75.84, a level unseen since 2011.
The decline followed Monday’s surprise announcement from the Saudi Arabian Oil Company that it was slashing prices for the U. S. in an effort to boost market share. Saudi Arabia holds 22 percent of the world’s crude oil reserves, according to the Organization of Petroleum Exporting Countries.
“With the United States becoming much more energy independent, we don’t rely on the Middle East for oil like we had to in the past,” said Bill Lynch, investment director at Hinsdale Associates, Inc. “There’s a lot of concern about global economic weakness and that’s affecting the price of oil.”
Shares of Archer Daniels Midland Company, the world’s largest corn processor, led gainers in the S & P 500 , increasing 4.85 percent to close at $49.54. Carriers Delta Air Lines Inc. and Southwest Airlines Co. also took off Tuesday, increasing 4.21 percent and 3.17 percent, respectively.
Shares of Michael Kors Holdings dropped 8.4 percent to $71.42, after the designer missed second quarter growth estimates. On the technology front, Sprint Corp. is searching for a signal as its subscriber base declined for the eleventh straight quarter. The Overland Park, Kansas-based cellular provider reported a second quarter $765 million net loss and announced that it was terminating 2,000 employees. Sprint Corp. shares fell 16.45 percent, closing at $5.18.
The yield on benchmark 10-year Treasury note fell slightly to 2.334 from 2.343.
Earlier Tuesday, the U.S. Department of Commerce reported that September’s international trade deficit widened 7.6 percent to $43 billion. The European Commission reduced its 2014 growth forecast for the Euro zone on Tuesday to 0.8 percent from its previous 1.2 percent.