NEW YORK, NY - JANUARY 15: People walk by the New York Stock Exchange (NYSE) on January 15, 2016 in New York City. Stocks have fallen significantly in morning trading with the Dow Jones industrial average down over 400 points as concerns about oil prices and the Chinese economy persist. Spencer Platt/Getty Images/AFP == FOR NEWSPAPERS, INTERNET, TELCOS & TELEVISION USE ONLY ==
NEW YORK: US stock indexes notched deep losses in volatile trading on Friday, with the S&P 500 hitting its lowest since October 2014 and the Dow losing more than 500 points, as oil prices dived below US$30 per barrel.
All 10 major S&P sectors were in the red and all 30 Dow components lower. The Russell 2000 small-cap index fell as much as 3.5% to its lowest since July 2013.
The beaten-down energy sector’s 4.43% slide led the declines, as oil prices fell 6.5%. The technology sector was down 4.31%, as Intel’s weak report weighed heavily on chip stocks.
“Investors are scared to death, and the fact that it’s happening at the beginning of year has some historical significance,” said Phil Orlando, chief equity market strategist at Federated Investors in New York.
At 1:01pm ET (1801 GMT), the Dow Jones industrial average was down 448.5 points, or 2.74%, at 15,930.55.
The S&P 500 was down 52.35 points, or 2.72%, at 1,869.49.
The Nasdaq Composite index was down 159.40 points, or 3.45%, at 4,455.60.
The three main indexes were set to test their percentage declines on Aug 24 when the market plunged after China devalued the yuan.
The S&P 500 has fallen 13% and the Dow 13.7% from their highs in May, pushing them into what is generally considered as ‘correction territory’.
The CBOE volatility index jumped as much as 29.2% to 30.95, it’s highest since September.
“When we started off the year, we were at the crossroads of concern and optimism and clearly, we’ve gone down the road of concern pretty quickly,” said Dan Farley, regional investment strategist at US Bank Wealth Management in Minneapolis.
Dow components Exxon and Chevron were down 2.5%-4%, while Caterpillar dropped 4.4%.
Intel tumbled 10% to US$29.48, its steepest drop in seven years, after the chipmaker’s results and forecast raised concerns about its growth.
That weighed on the chip index, which fell 5.8%, its steepest drop since March.
Citigroup was down 7.5% at US$41.99, while Wells Fargo fell 4.6% to US$48.29, after reporting largely in-line quarterly earnings.
Wynn Resorts was the among the very few bright spots, rising 7.4% to US$55.29 after reporting in-line of quarterly revenue.
US economic data on Friday was also not very encouraging, with an unexpected drop in retail sales and industrial output declining again in December, underscoring a worsening outlook for fourth-quarter economic growth.
“It depends on where we close today, but things could get worse before it gets better,” said Art Hogan, chief market strategist at Wunderlich Securities in New York.
Declining issues outnumbered advancing ones on the NYSE by 2,850 to 240. On the Nasdaq, 2,527 issues fell and 289 rose.
The S&P 500 index showed no new 52-week highs and 135 new lows, while the Nasdaq recorded four new highs and 477 lows. - Reuters
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