While you were sleeping: UPDATED US stocks, oil continue to slide

Stocks on Wall Street fell with US government bond yields as a selloff in the oil market deepened.

 US-traded crude oil for April delivery fell 1.4% to $US47.72 a barrel, its lowest settlement since November, as Saudi Arabia trimmed some of its production cuts.

Saudi Arabia told OPEC it increased production in February, putting it above 10 million barrels a day but still below a production limit agreed upon between producers in an effort to stem the global glut.

Saudi Arabia increased production to 10.01 million barrels a day in February, up from 9.75 million barrels a day in the previous month, but below the 10.47 million barrels a day produced in December, according to OPEC's monthly report.

"Despite the supply adjustment, stocks have continued to rise, not just in the US, but also in Europe," OPEC says. "Nevertheless, prices have undoubtedly provided a floor by the production accords.

"The speculative community is heavily stacked to the bullish side, buoyed by OPEC's renewed willingness to correct market oversupply and underpinned by early indications of historically high conformity."

Saudi Arabia placed extra crude into storage at domestic refineries and terminals rather than sending it to international markets, Bloomberg reported, citing a person familiar with policy.

Wall Street slides
At the close of trading in New York, the Dow Jones Industrial Average was down 44.11 points, or 0.2%, to 20,837.37. The Nasdaq Composite Index declined 0.3% to 5856.82 and the Standard & Poor's 500 Index retreated 0.3% to 2365.45.

The Federal Open Market Committee began its two-day meeting and is widely expected to announce an interest rate increase tomorrow. Investors will scrutinise clues on whether policy makers now see a steeper pace of rate hikes ahead.

"It's a foregone conclusion the Fed will raise rates, but there is an expectation the central bank may raise its expectation from three hikes this year to four," Michael Scanlon, portfolio manager at Manulife Asset Management in Boston, told Reuters.

In the Dow, slides in Chevron and Caterpillar shares, down 1.6% and 1% respectively, outweighed gains in Wal-Mart and Nike shares, up 1.6% and 1.3%.

Shares of Valeant Pharmaceuticals shed 10% to $US10.89 after William Ackman’s Pershing Square Capital Management, formerly the company’s biggest backer, sold its stake.

Bond prices rose as the yield on 10-year US Treasurys fell to 2.595% from 2.609% on Monday, the highest close since 2014.

In Europe, the Stoxx 600 Index finished the day with 0.3% drop from the previous close.

Germany's DAX Index inched 0.01% lower, while the UK's FTSE 100 Index slipped 0.1%, and France's CAC 40 Index dropped 0.5%.

Dutch shares drop
In the Netherlands, the benchmark AEX Index shed 0.4% a day before Dutch elections. Opinion polls were split, with two showing Prime Minister Mark Rutte's Liberals ahead of the anti-Islam, anti-European Union Freedom Party and the other showing the two parties tied, according to Bloomberg.

In fresh deal news, shares of Brazil's JBS rose 2.5% in afternoon trading in Sao Paulo, after the world's top meat processor says it has agreed to buy US-based Plumrose, which produces ham and bacon, for $US230 million.

The acquisition, a deal between JBS USA and Danish Crown, includes five prepared foods facilities located in Indiana, Iowa, Mississippi and Vermont and two distribution centres located in Indiana and Mississippi, JBS says in a securities filing.

"The acquisition of Plumrose is a continuation of JBS' strategy of expanding its portfolio of branded, high value prepared foods, and strengthens its customer base and geographical distribution in the United States," JBS says.

(BusinessDesk)