Stocks fell heavily today as the stock market had its first losing week in over a month and a half. The Dow Jones dropped 315.51 points to end the day at 17,280.83, marking a 1.8% fall on the day. Further, the S&P 500 dropped 33 points while the Nasdaq dropped 54.57 points, corresponding to a 3.5% and 2.7% drop respectively for the week. Much of the recent decline in the stock market has been due to falling energy prices.
Crude oil is now at a new 5 year low, and fears about an energy sector decline are rampant. A drop in oil prices is usually beneficial to consumers, however the rate of the decline does worry some. Oil fell to $58, a 12% decline on the week and its lowest rate since May 2009. Gas prices have fallen close to 50% since their peak prices in the summer. A lot of smaller oil companies run the risk of going out of business, which would have many repercussions. Many of these oil companies are financed through junk bonds and smaller banks, which could cause a lot distress through the fixed income market. The International Energy Agency decreased its oil demand growth in 2015 by 230,000 barrels a day. Further the low prices place a lot of stress on US shale producers before they can really settle. This could lead to a lot of upcoming bankruptcies and debt restructurings as well. OPEC does not seem to really be in any rush, as they have not planned any meetings to address the recent fall in prices.