While you were sleeping: UPDATED Saudi oil stance hits equities

Stocks on both sides of the Atlantic dropped with the price of oil after Saudi Arabia's oil minister said his country won't cut output.

Earlier this month, Saudi Arabia and Russia agreed to freeze oil production at January levels, if other producers will follow suit. Oil prices fell more than 5%.

"We are not banking on cuts because" there is "less than trust" that "countries are going to deliver even if they promise," Saudi Oil Minister Ali Al-Naimi said in Houston, Bloomberg reported.

High-cost producers would have to "lower costs, borrow or liquidate" to cope with the slump in oil prices, he added.

"It may sound harsh, and unfortunately it is, but it is the most efficient way to rebalance markets. Cutting low-cost production to subsidise higher-cost supplies only delays an inevitable reckoning."

While US Treasurys rose, Wall Street fell. At the close, the Dow Jones Industrial Average dropped 188.88 points, or 1.1%, to 16,431.78. The Nasdaq Composite Index shed 1.5% to 4503.58 while the Standard & Poor's 500 Index declined 1.25% to 1921.27.

Rally ends on Wall Street
The pullback follows a week and a half of a rebound among major stock indexes, which tumbled in January and early February amid concerns about a steep drop in oil prices and the pace of global economic growth.

After tumbling more than 10% through to February 11, the indexes have clawed back and notched substantial gains. Since hitting this year’s trough, US stocks have risen more than 5%.

Slides in shares of Goldman Sachs and those of Chevron, last down 2.9% each, led the decline in the Dow. All 30 stocks on the Dow traded lower in the early afternoon.

Shares of JPMorgan Chase dropped 4.2% after the largest US bank by assets said it would set aside more money to cover potential hits from the energy, metal and mining sectors.

At its annual investors day, JPMorgan said it will reserve an additional $US500 million for potential losses in oil and gas as well an extra $US100 million for potential losses in metals and mining by the end of the first quarter of this year.

"The market is still groping for direction," Scott Brown, chief economist at Raymond James in St. Petersburg, Florida, told Reuters. "You still see this hypersensitivity to what's going on with the price of oil and the market's reacting on a day-to-day basis to that. It really shouldn't but it gives you a sense of the nervousness out there."

Time interested in Yahoo
Meanwhile, Time, the publisher of Sports Illustrated, People and Time magazines, has been exploring a deal to acquire Yahoo's core business, according to media reports citing unnamed sources.

Time has heard a presentation from Citigroup bankers on pursuing a deal to merge with Yahoo, Bloomberg reported, citing people familiar with the matter. The idea is of real interest to Time chief executive Joe Ripp. Citigroup hasn't been retained, according to Bloomberg.

Shares of Time recently traded 2.6% lower while those of Yahoo were 1.2% weaker.

Bucking the downward market trend were shares of Home Depot, last 2.2% higher, after the home improvement chain reported quarterly earnings that surpassed expectations.

In Europe, the Stoxx 600 Index ended the session with a fall of 1.2% from the previous close. The UK's FTSE 100 Index slid 1.3%, France's CAC 40 Index retreated 1.4%, while Germany's DAX Index decreased 1.6%.

(BusinessDesk)