US stocks have fallen after a choppy session as lower oil prices pressure energy stocks for a fifth day and weak Chinese trade data reignites fears of a global slowdown.
Crude prices hovered near seven-year lows after US crude dipped below $US37 per barrel and Brent fell below $US40 for the first time since early 2009 on fears that global oil producers will pump even more crude in a saturated market.
Data released overnight showed China's imports fell for the 13th consecutive month, with an 8.7 per cent decline in November compared with a year earlier.
The China data added pressure to the energy and materials sectors as it sparked fears about a global recession and demand worries for commodities.
"The sustained US crude price below $US40 is a bit of a shock to investors," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.
"China has been for some time the buyer at the margin. Traditionally they would come in when prices were down and buy inventory very shrewdly."
The Dow Jones industrial average fell 162.51 points, or 0.92 per cent, to 17,568, the S&P 500 lost 13.48 points, or 0.65 per cent, to 2,063.59 and the Nasdaq Composite dropped 3.57 points, or 0.07 per cent, to 5,098.24.
The Dow Jones Transport Average index fell 2.8 per cent, its biggest one-day percentage decline since August 24, in another sign investors are anxious about economic growth prospects, said Peter Cardillo, chief market economist at First Standard Financial, in New York.
Oil major Exxon, fell 2.8 per cent and was the biggest drag on the S&P. The S&P energy sector fell 1.5 per cent in its fifth straight day of declines and has fallen 10.4 per cent since December 1.
Some investors expect oil soon to bounce back and reverse broader market sentiment.
"I suspect we could be in for a nice rally in spite of the fact the Fed is likely to raise interest rates next week," Cardillo said.
The US Federal Reserve had cited macroeconomic uncertainty in its decision to hold rates steady at its September meeting. But most analysts think it will go ahead with a rate hike at its meeting on December 15 and 16.
Nine of 10 major S&P 500 sectors fell, with a 1.9 per cent fall in the raw materials index leading the decline. The S&P's health sector was the sole gainer, with a 0.2 per cent increase for the day.
Declining issues outnumbered advancing ones on the NYSE by 2,078 to 1,014, for a 2.05-to-1 ratio on the downside; on the Nasdaq, 1,678 issues fell and 1,130 advanced for a 1.48-to-1 ratio favouring decliners.
The S&P 500 posted eight new 52-week highs and 34 new lows; the Nasdaq recorded 26 new highs and 180 new lows.
More than 7.5 billion shares changes hands on US exchanges, compared with the 6.87 billion average for the last 20 sessions, according to Thomson Reuters data.
By AAP
