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Stocks plunge as oil prices drop below $50 per barrel

First Day Of Trading for 2015 On The Floor Of The NYSE As U.S. Stock-Index Futures Rise After S&P 500's December DeclineFirst Day Of Trading for 2015 On The Floor Of The NYSE As U.S. Stock-Index Futures Rise After S&P 500's December Decline
Traders work on the floor of the New York Stock Exchange.Photograph by Jin Lee — Bloomberg via Getty Images

U.S. stocks have opened the first full week of 2015 with a steep decline, with the Dow Jones industrial average dropping 331 points, as falling oil prices weighed on the energy sector.

Oil prices continued their months-long decline Monday, with the price of crude briefly falling below $50 per barrel for the first time in more than five years earlier in the session on account of global oversupply. Concerns over the worldwide oil glut heightened in the past week as both Russia and Iraq posted record oil supplies. Energy companies have suffered as a result of the falling oil prices and industry stocks were hit hard again to start the week.

Chevron (CVX) closed the day down around 4% — a drop that knocks roughly $8 billion off the energy giant’s market cap. Meanwhile, Exxon Mobil (XOM) also fell sharply, as did shares of BP (BP). Oil field services company Halliburton (HAL) also saw a sharp price drop.

The energy industry losses caused the broader U.S. market to slump, with the Dow index closing the day down 331 points, or 1.9%. The blue-chip index has dropped sharply since crossing the 18,000-point mark for the first time in history late last year.

The broader S&P 500 index finished the day down 1.8%, while the Nasdaq composite fell about 1.6%.

U.S. stock indexes suffered their biggest losses in 3 months Monday, having finished 2014 on a fairly strong note, with the Dow gaining 7.5% on the year, while the S&P 500 improved by almost 12%, and the Nasdaq gained more than 13%.

Another potential factor in the day’s market drop was news of more troubles in Europe. The euro fell to its lowest level against the dollar in nine years Monday, driven by fears of political turmoil in Greece and hopes for more monetary stimulus from the European Central Bank.