Stock market slides again; worst two-week start to a year
ASSOCIATED PRESS
A man is reflected on the electronic board of a securities firm in Tokyo on Friday.
Never before has Wall Street gotten off to a worse start to a year.
The stock market capped the first two weeks of 2016 with a steep slide Friday that sent the Dow Jones industrial average down nearly 400 points.
All three major stock indexes — the Dow, the Nasdaq composite and the Standard & Poor’s 500 — are now in what’s known as a correction, or a drop of 10 percent or more from their recent peaks.
The market has been on a stomach-churning ride since the start of the year, wrenched up — but mostly down — because of alarm over a slowdown in China and the plunging price of oil to its lowest level in 12 years. Investors are already seeing damage to U.S. corporate profits, particularly at energy companies.
The Dow slid 390.97 points, or 2.4 percent, to 15,988.08. The average had been down more than 500 points early in the afternoon. The S&P 500 ended down 41.51 points, or 2.2 percent, at 1,880.33. The Nasdaq dropped 126.59 points, or 2.7 percent, to 4,488.42.
The Dow and S&P 500 have now fallen about 8 percent this year, while the Nasdaq is off about 10 percent.
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“Oil is the root cause of today,” said Dan Farley, regional investment strategist at the Private Client Reserve at U.S. Bank. “People are uncertain, and when they’re uncertain they’re scared.”
Crude oil has dropped below $30 a barrel from a high of over $100 during the summer of 2014, eviscerating energy company profits. On Friday, Williams Cos. led a slide among oil, gas and mining companies, falling $2.19, or 12 percent, to $16.10.
Investors also got some discouraging economic news on Friday: The Federal Reserve said U.S. industrial production, which includes manufacturing, mining and utilities, dropped in December for the third month in a row. And another government report indicated U.S. retail sales dipped last month.
Many investors had welcomed the new year with fairly high hopes. They expected oil prices would stabilize. After a market correction in August, few forecast it would happen again so soon. And the Federal Reserve’s move in December to raise interest rates for the first time in nearly 10 years signaled to many that the U.S. economy was healthy.
“The hope was global growth would stabilize, and early in 2016 here, that has been a disappointment, too,” said David Chalupnik, head of equities at Nuveen Asset Management.
Despite the rough start to the year, Wall Street watchers are not ready to say the bull market is over.
“We don’t believe we’re going into a bear market,” Chalupnik said. “The reason for that is the U.S. economy is sound.”
Intel dropped 9.1 percent after the chipmaker posted its fourth-quarter results, noting its personal computer business continues to slump. The stock was the biggest decliner in the Dow. It fell $2.98 to $29.76.
Benchmark U.S. crude fell $1.78, or 5.7 percent, to $29.42 a barrel in New York. Brent crude, a benchmark for international oils, fell $1.94, or 6.3 percent, to $28.94 a barrel in London.
Stocks opened higher in Europe but quickly fell. Germany’s DAX lost 2.5 percent, while France’s CAC 40 dropped 2.4 percent. Britain’s FTSE 100 fell 1.9 percent.
In China, the Shanghai Composite Index slid 3.6 percent to its lowest close in 13 months. China’s official Xinhua News Agency reported that new bank loans during the last month fell from a year earlier, another sign that the country’s economic growth is slowing from the torrid pace of the past few years.
Hong Kong’s Hang Seng dropped 1.5 percent. Japan’s Nikkei 225 lost 0.5 percent and South Korea’s Kospi 1.1 percent.
In other energy trading, wholesale gasoline fell 5 cents to close at $1.02 a gallon, heating oil fell 5 cents to close at 93 cents a gallon, and natural gas fell 4 cents to close at $2.10 per one thousand cubic feet.
Precious and industrial metals futures closed mixed. Gold rose $17.10 to $1,090.70 an ounce, silver gained 15 cents to $13.90 an ounce and copper fell 3 cents to $1.94 a pound.
Bond prices rose. The yield on the 10-year Treasury note fell to 2.03 percent from 2.09 percent late Thursday. The euro rose to $1.0911 from $1.0862, while the dollar fell to 117.05 yen.
33 responses to “Stock market slides again; worst two-week start to a year”
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Nice, just tanked up at Costco this morning at $2.16 per gallon, and I’m saving about $1,000 over the course of a year. Thanks, North Dakota and the rest of the frackers who found a way to succeed despite the many obstacles thrown in their paths by an anti-business administration.
Cheaper at a military PX gas station without the line, anytime of the day.
Don’t bet on it.
America will always be supporting our armed forces.
Looks like Wall Street’s marketing hype to Main Street is over.
I only go shopping after the stock market crashes.
Always the “Cheap Charley”, eh Mike. Better get down to Kmart and their liquidation sale.
70% off sale at the Office Depot in Honolulu.
butinski. Great idea. The homeless can pet my furry puppies.
Not to worry. President Obama’s SOTUS said that our economy is on track and don’t believe the pundits. 14 million jobs since he took office! Unfortunately, what he said contradicts what’s happening in the real world.
Obama can only do so much. It’s up to the Republican party to shake hands with the President.
Ha! Yes he can only do so much like bypass both houses of Congress and instead resort to issuing executive orders! So much for cooperation.
The President as well as most politicians do not understand the economy and the dynamics stock market and end up dressing it up with a political spin than “what is”…they get paid a guaranteed annunity…pension. I listened to the State of the Union address and wondered what planet Obama was talking about! By the way, the stock market is a dynamic and very challenging and require research and prudent decision making. It can be fun…a roller coaster ride but diversify you portfolio to minimize your downside risks. The economy is sometimes harder to figure out depending a mix of variables (consumer behavior…the consumer psyche).
Economic indicators are up. The facts are in. Obama is right.
You can work the numbers and massage it to achieve your end game…good game but the losers are those who go along blindly.
The stock market isn’t the US economy. The stock market reflects the fears and ambitions of the 28 up old company traders who study the market.
If oil prices go down, then there is more money available to spend on other things, like food, clothing, housing, etc. So some sectors of the economy go down (energy) and others will go up. It should be a wash and the lower energy costs should be getting passed along to consumers (Please note: I said should).
In essence people…regular people…have not seen an increase in earned income…unless you can supplement with non-reported income (under the table or cash). Regardless many do not have the discretionary income to spend…or simply leaving it in cash reserves or guaranteed income and not really going on a buying spree. Bottom line…confidence in the economy is just not there as evident by market fall and suspect data (not just jobs…discretionary $’s ) The only one’s who probably don’t seem to worry are those who are on a fix annuity (defined pension / govt. pension, social security).
Yep, been retired over 25 years and although most of my stocks are down my standard of living has n’t changed much. As one gets older our wants and needs wane, thus more money is available for what?
cojef. Here’s to another twenty five of a happy, Golden Years in retirement.
Viagra?
So how does Wall Street expect Main Street to go shopping when it refuses to pay them well?
The low hanging fruit in America is over. No more easy source of money anymore.
The real quote from Wall Street should be that they failed to see the decline of oil prices two years ago.
Wall Street banks locked into oil derivatives contracts are left holding the bag.
I remained uncertain with the economy even during the good times.
Make sure you keep a comfortable % of your money in cash reserves (at least 10% or 3 – 5 years) to cover yourself and the remainder you invest at your discretion. Right now we are in the “late phase” of the business cycle (before hitting a true recession) and may want to review portfolio and allocation funds into the appropriate sectors (if sector investing)…just my opinion.
Pretty soon a barrel of oil will cost less than a quart of synthetic oil from the store.
and will oil jump up to $100.00/barrel next year?
Could be…OPEC etal…drop the price and have U.S. production close up and then those still in the game come back with a passion and we see crude at $100+ per barrel. This is leveraging at it’s best and you need someone who knows how to leverage your opposition…play hardball. We have a lot opposition out there wanting to dominate OPEC & Russia…interesting who wants to end up supplying Europe with oil and where the pipeline will run across? Does Syria sound familiar and who do you back Assad or the rebels? and why?..just saying.
Was living in Houston, Texas in the mid 80’s when a barrel of crude was selling for below $30. The results were many, big box stores and malls were being boarded up and rents and commodity prices were very low. of course other economic woes were the high incidence of home foreclosures. The “oil patch” was in deep sh-t. Was lucky found an apartment across the street from my office so was able to walk to work and also have lunch at home. Took all of 5 minutes each way. We economized by driving our second back to California for our son to use once a week for his commuting. He also paid the mortgage while we were in Texas. We returned after 3 years.
You adapted very well and compliments to your perseverance.
Yes, Europeans are doing bad. Chinese market is fearful but the economy is healthy. Little will come from this current panic, except there will be some good buys for stocks.