Stock Market Today: Falling Oil Prices Undercut Global Growth Prospects

NEW YORK (TheStreet) -- U.S. stocks have recovered from session lows on Tuesday, though the S&P 500 and Nasdaq remained lower and the Dow Jones Industrial Average hovered near the flat-line as energy stocks declined amid falling oil prices. Sector heavyweights Exxon Mobil (XOM)  and Chevron (CVX)  fell 0.65% and 1%, respectively, after Saudi Arabia cut sales prices to the U.S. a day earlier.

"If the oil price is down because it's a waning economic growth story globally, then that's a concern for investors," said Karyn Cavanaugh, senior market strategist for Voya Investment Management, in a phone call. "If it continues to go down due to waning global growth (and therefore, deflationary), that would spell trouble for corporate earnings and for the economy as a whole."

Prices for West Texas Intermediate slumped 1.9% to $77.28 a barrel and Brent crude slid 1.9% to $83.17 a barrel after Saudi imports for December delivery were slashed 45 cents from a month earlier. The Energy Select Sector SPDR exchange-traded fund (XLE)  tumbled 2.1%.

Watch the video below for a closer look at how U.S. markets are doing in midday trading Tuesday:

The S&P 500 slid 0.35% and the Nasdaq slipped 0.43%. The Dow Jones Industrial Average pared earlier losses and moved in and out of positive territory.

Adding to global growth concerns, the European Commission tempered its expectations for the eurozone through 2016 on continued deflation concerns and unemployment woes. The body cut its forecast for growth next year to 1.1% from 1.7% with significantly lowered estimates for the region's two largest economies, Germany and France.

Soft guidance from several companies also shook investor confidence. Priceline (PCLN) shares were the worst performers of the S&P, down nearly 9% after offering fourth-quarter guidance of $9.40 to $10.10 a share compared to analysts' estimates of at least $10.91. Michael Kors (KORS) fell 7.8% after the luxury brand forecast profit for the holiday season below analysts' estimates. 

Sprint (S)  was tumbling 19.1% after reporting its 11th consecutive quarter of subscriber losses. The telecom also said it would cut 5% of its 31,000-strong work force.

Herbalife (HLF) tanked more than 20% after being downgraded to "neutral" with a lowered price target at SunTrust following disappointing third-quarter earnings.

Alibaba (BABA) , the Chinese e-commerce giant, posted revenue in the July-September quarter that was 53.9% higher year over year, to $2.74 billion, while net income of 45 cents a share came in as expected.

Shares were up 2.8%, remaining around 45% higher than their initial public offering price in September, valuing the company more than Wal-Mart (WMT)  at more than $246 billion.

Office Depot (ODP) was another rare gainer on Tuesday, adding more than 20% after quarterly net income of 10 cents a share exceeded estimates by a penny.

In other news, U.S. citizens head to the polls Tuesday for the mid-term elections, the results of which could set the stage for the 2016 presidential elections. The results will also determine whether Republicans can take hold of the Senate.

Should Republicans win, Raymond James' Jeffrey D. Saut wrote in a note: "The equity markets [could] rally into an upside blow-off move. That would fit nicely with the typical 'buying stampede' that is now at session 14 in the typical 17-to-25 session progression."

-- Written by Keris Alison Lahiff in New York.

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