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Wall Street was firmly in the red amid a renewed slump in oil prices iStock

US equity markets veered south on 2 February, as a fresh decline in oil prices offset the feel-good factor generated by upbeat earnings from Michael Kors, Mattel and Google's parent company Alphabet.

Shortly after the opening bell, the Dow Jones Industrial Average was down 1.22% to 16,248.43 while the S&P 500 and the Nasdaq were 1.10% and 0.79% lower respectively, dragged lower by a renewed slump in crude prices, which saw both benchmarks lose more than 5%.

Brent crude fell 5.61% to $32.42 (£22.55, €29.74) a barrel, while West Texas Intermediate tumbled 5.05% to $30.10 a barrel.

"This slide in oil prices was all the more surprising given that the US dollar also slipped back after weaker-than-expected ISM manufacturing numbers for January showed a sharp drop in the employment component to 45.9 from 48, which if translated into Friday's payrolls numbers could well see the numbers come up short of expectations," said Michael Hewson, chief market analyst at CMC Markets.

The fall in oil prices, however, did not seem to trouble Chinese investors, as the Shanghai Composite Index closed up 2.26%, bucking a trend that saw the majority of Asian markets close in the red. European stocks were also in negative territory, with Britain's FTSE 100 and France's CAC 40 both down 2.10% by mid-afternoon, while Germany's Dax and the Pan European Stoxx 600 index were down 1.43% and 1.86% respectively.

Elsewhere, shares in Michael Kors surged after the accessories-maker posted better-than-expected results before the opening bell, while toymaker Mattel was firmly in positive territory after its quarterly results beat expectations.

Shares in Alphabet also gained ground after Google's parent company delivered better-than-expected results late on 1 February, while US-listed shares in oil giant BP plunged after the group reported its annual profit halved on the back of one-off charges and the ongoing decline in oil prices.

"In this reporting season, 78% of S&P 500 companies that have posted fourth-quarter figures have seen better-than-expected earnings per share, however, only 48% have posted better-than-expected sales," said IG's market analyst Alastair McCaig.

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