Stocks fell Tuesday morning as crude oil slumped on higher global production growth forecasts.
The S&P 500 was down 0.52%, the Dow Jones Industrial Average fell 0.3%, and the Nasdaq declined 0.6%.
Crude oil declined on Tuesday after the Organization of Petroleum Exporting Countries raised its forecasts for non-member output this year as demand grows and activity in shale production rises. OPEC anticipates non-member production to rise by 400,000 barrels per day, according to its monthly report. Prices have already been under pressure after a weekly reading on domestic supplies showed stockpiles at record levels.
West Texas Intermediate crude was down 1.9% to $47.45 a barrel on Tuesday morning.
The energy sector was one of the worst performers on markets Tuesday. Major oil companies including Halliburton (HAL - Get Report) , Chevron (CVX - Get Report) , ExxonMobil (XOM - Get Report) , Total (TOT - Get Report) and BP (BP - Get Report) were all lower, while the Energy Select Sector SPDR ETF (XLE - Get Report) fell 1.8%.
Producer prices in the U.S. rose at a faster pace than anticipated in February. The Producer Price Index increased by 0.3%, according to the Bureau of Labor Statistics, half the increase of a month earlier but three times higher than estimates. Core prices rose by 0.3%, higher than a targeted 0.2% increase.
It's likely to be a low-volume day of trading on Wall Street as a blizzard dumps nearly two feet of snow on New York City. Mayor Bill de Blasio declared a state of emergency for the city, warning that the storm could bring 16 inches to 20 inches of snow. Non-essential travel has been banned and the city's schools have been shut. More than 5,000 flights had been cancelled.
Trading already has been fairly quiet this week as investors sit in wait for the Federal Reserve's announcement on interest rates Wednesday afternoon. Members will convene on Tuesday morning, regardless of the storm, for their two-day meeting to decide on monetary policy. The Fed is widely expected to hike interest rates by 25 basis points, particularly after a robust February jobs report backed up the case for higher rates. The Fed will also release updated forecasts, including the '"dot plot" matrix that visualizes each Fed member's expectations for the pace of future hikes.
The Congressional Budget Office released its score on the Republicans' American Health Care Act late Monday afternoon and the details refute Donald Trump's promise for everyone to remain on health care. The CBO calculated that 24 million more people will be uninsured by 2026, including 14 million more by 2018. Premiums are expected to jump 20% in the individual market in 2018 and 2019.
Valeant Pharmaceuticals (VRX) fell more than 10% on Tuesday after activist investor Bill Ackman reported he had liquidated his position in the drug company and plans to eventually step down from the board.
Ackman, the activist fund manager behind fund Pershing Square Capital Management, steadfastly has supported Valeant over the past year, but said Monday the investment represented a disproportionately large amount of time and resources and he decided to sell its investment and realize a large tax loss.
The company has been struggling in the aftermath of a report issued by short-seller activist Andrew Left of Citron Research in October 2015 alleging a secret relationship between Valeant, a mail-order pharmacy and one of its customers.
Neiman Marcus has hired advisers to explore strategic alternatives, including a possible sale, the company said Tuesday. The retailer has reportedly attracted the interest of Hudson's Bay Co., which may turn its attention away from its interest in Macy's (M - Get Report) to pursue Neiman, according to The Wall Street Journal.
Air Methods (AIRM) increased more than 3% on Tuesday after agreeing to an acquisition by American Securities. The latter offered $43 a share in an all-cash deal with a total value of around $2.5 billion. The deal is expected to close in the first half of this year.
Wall Street Goes to Washington: In the first of a series of conversations with the President's economic advisors, acclaimed author and columnist Michael Wolff will sit down with Anthony Scaramucci, co-founder of private equity firm Skybridge Capital, to discuss the Trump administration, his thoughts on policies and regulations under debate and his outlook for the next four years. Join us for this cocktail party on Monday, March 27 at The Metropolitan Club in New York. The event is free, but seating is limited and reservations are required. For more information or to RSVP, email firstname.lastname@example.org.