NEW YORK (AP) — Stocks were mostly lower on Tuesday, led by a drop in energy stocks as the price of oil continued to fall. Investors were also disappointed by earnings outlooks from companies including Priceline and Michael Kors.
KEEPING SCORE: The Standard & Poor's 500 index fell six points, or 0.3 percent, to 2,011 as of 2:34 p.m. Eastern time. The Dow Jones industrial average rose 14 points, or 0.1 percent, to 17,381 points. The Nasdaq composite dropped 18 points, or 0.4 percent, to 4,620.
OIL LOSERS: Energy stocks in the S&P 500 index dropped 1.9 percent, extending their losses for the year to 5.5 percent as oil prices fell. U.S. benchmark crude slumped $1.59, or 2 percent, to $77.19 a barrel, the lowest price since October 2011. Brent crude, the international benchmark, fell $2.34, or 2.8 percent, to $82.43 a barrel.
Oil has fallen sharply in recent weeks as global supplies rise while demand for fuel trails earlier expectations. The latest move down in the price was prompted by reports that Saudi Arabia is cutting the price of oil that it supplies to the U.S. as it attempts to maintain its market share as U.S. production booms.
OIL WINNERS: The slumping price of oil is giving a boost to airlines, because the cost of fuel is their single largest operating cost. Delta Airlines surged $1.38, or 3.4 percent, to $42. United Continental, Jet Blue and Southwest Airlines also logged big gains.
CONSUMER BOOST: While slumping oil prices were hitting stocks hard, they should benefit the economy in the longer run as lower gas prices filter through to consumers, said Ernie Cecilia, Chief Investment Officer of Bryn Mawr Trust. The consumer should also benefit as interest rates continue to remain low, even after the Federal Reserve has stopped buying bonds as part of its economic stimulus.
"When oil spikes, all you hear about is that it's a tax on the consumer, so conversely, it's a windfall of sorts for the consumer, so it's a plus," said Cecelia.
BOOKING TROUBLE: Priceline logged the biggest slump in the S&P 500. The company's stock dropped $104, or 8.7 percent, to $1,094 after the company hinted that the weak economic backdrop in Europe would hurt its earnings in the current quarter. The booking company reported that its earnings rose 28 percent in the third quarter, but its outlook for the current quarter fell short of analysts' projections.
Michael Kors also fell after the handbag and shoe company gave an outlook for the fourth quarter that disappointed investors. The stock fell $6, or 7.7 percent, to $71.99.
EUROPE'S DAY: The European Union cut its already low economic growth forecasts further on Tuesday, indicating the recovery will remain sluggish amid problems for the biggest economies, particularly France and Germany. The official forecast for growth this year in the 18-country eurozone was cut to 0.8 percent from a prediction of 1.2 percent made in the spring. The institution also cut its forecast for next year.
Germany's DAX dropped 0.9 percent to 9,169 while France's CAC-40 fell 1.5 percent to 4,129. The FTSE 100 of leading British shares fell 0.5 percent to 6,453.
SUPPLEMENT SLUMP: Herbalife shares sank in after the company reported disappointing third-quarter results and a weak outlook late Tuesday. The seller of supplements and weight-loss products reported a profit of $11.2 million, or 13 cents per share, for the most recent quarter. That's down 92 percent from the $142 million, or $1.32 per share, earned last year. The company's stock slumped $11.69, or 20.9 percent, to $44.19.
ELECTION DAY: Investors will also be keeping an eye on the outcome of the midterm elections. Polling across the board gives Republicans well over a 50 percent chance of turning out at least six incumbent Senate Democrats or capturing seats left vacant by Democrat retirements, an outcome that would put the opposition in charge of both houses of Congress in the final two years of Obama's second White House term.
BONDS AND CURRENCIES: The dollar's surge against the yen abated Tuesday after rising to its highest point in almost seven years on Monday. The U.S. currency traded flat at 113.51 yen. It fell against the euro, trading at $1.2550. U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 2.32 percent.
METALS: In metals trading, silver for December delivery slumped 25 cents, or 1.5 percent, to 15.95 an ounce. Gold for the same month dropped $2.10, or 0.2 percent, to $1,167.70 an ounce. Copper for December slipped 4.7 cents, or 1.5 percent, to $3.02 per pound.
