U.S. stocks turned down amid choppy early trading that had suggested a more upbeat start to Tuesday trade, as oil prices continue to slump.
Investors are maintaining a cautious posture after a brutal sell-off on Monday, which saw the closely watched Dow shed 331 points.
On Tuesday, investors were scouring for safe industries such as utilities, health care and consumer staples, as well as U.S. Treasurys, pushing yields to seven-month lows.
The S&P 500 SPX, -0.50% was roughly flat with defensive sectors, such as utilities, health care and consumer staples moving higher earlier in the day. Energy stocks that fell 4% on Monday were also relatively higher.
The Dow Jones Industrial Average DJIA, -0.55% inched lower. The Nasdaq Composite COMP, -0.82% dipped in and out of positive territory and was heading lower.
Crude-oil prices extended losses on Tuesday, with U.S. oil futures CLG5, -3.30% down 1.8%, trading just below $49 a barrel. Brent futures LCOG5, -2.71% were down 1.2%, off intraday lows.
“The economic conditions that oil faces continue to be aggressively against the commodity, making buyers extremely hesitant to even consider entering long positions,” said Jameel Ahmad, chief market analyst at FXTM, in a Tuesday note. “There are also suspicions that as oil companies struggle to adapt to lower profits, there could be mergers and acquisitions taking place in the future, and this will weigh on investor sentiment. What’s the answer to this equation? Bearish moves for oil.”