U.S. stocks slide as oil extends decline

NEW YORK - U.S. stocks continued to lose air Tuesday, extending a slump from a day earlier amid a further decline in oil prices.

The Standard & Poor's 500 index dipped below 2,000 points earlier in the day for the first time since mid-December before recovering to close at 2,003, down 18 points. The Dow Jones industrial average continued yesterday's slide, losing 130 points, or 0.8 percent, to end 17,372. The blue-chip index had lost 460 points in the last two trading sessions. The Nasdaq composite index dropped 60 points, or 1.3 percent, to 4,593.

The yield on the 10-year Treasury note fell below 2 percent.

U.S. crude continued to fall, dropping $1.60 to $48.47 a barrel on the New York Mercantile Exchange. The price of oil has fallen by more than half since trading as high as $107 in June. Brent crude, the global benchmark, was down $1.37 at $51.74 a barrel.

The prolonged slide in oil prices should help economic growth by reducing energy costs, but investors worry that the large scale of the downturn could foretell a global economic slowdown. Also, as the price of oil falls, energy companies might cut jobs, put off investment or go out of business.

A report that orders to U.S. factories fell for a fourth straight month in November stoked investors' concerns about growth. The Commerce Department said Tuesday factory orders dropped 0.7 percent in November after a similar 0.7 percent fall in October. The November weakness came from decreases in demand for primary metals, industrial machinery and military aircraft. The decline could cut into GDP in the final three months of 2013, according to BMO Capital Markets.

Government data on Tuesday also showed slower December growth for nonmanufacturing firms. Still, most forecasters are holding fast to predictions of modestly stronger growth this year.

"Overall, there has been a slowdown in global growth during the past six months, but not a new crisis," said Andrew Kenningham, senior global economist with Capital Economics, in a note. "We still think world GDP is likely to expand by around 3 percent this year, for a fourth successive year."

Germany's DAX rose 0.4 percent and France's CAC-40 fell 0.2 percent. Britain's FTSE 100 lost 0.4 percent.

The possibility that Greece's anti-austerity Syriza party might win national elections this month has fed doubts about whether the country will stick to terms of its bailout and remain in the euro bloc. Meanwhile, a new survey showed that economic growth in the eurozone was weak at the end of 2014, suggesting that a robust recovery is still a dim prospect. The news helped keep pressure on the euro, which was down 0.2 percent to $1.1921, near a nine-year low.

In government bond trading, the yield on the 10-year Treasury note fell back below 2 percent. Apart from a brief dip in the fall, it's the first time the note's yield has fallen below that level in more than 18 months. The yield on the note, which drops when prices rise, dropped to 1.97 percent on Tuesday.

The dollar declined to 118.75 yen from 119.44 yen.