US stocks sink on jitters over North Korea, China weakness

The price of oil fell to its lowest level since late 2008 and a key benchmark of the USA market was headed for its lowest close since October.

Activity in China’s services sector expanded at its slowest rate in 17 months in December, a private survey showed on Wednesday, in a further indication that the world’s second-largest economy may be losing steam.

In commodities, crude oil prices struggled near 11-year lows and added to the risk-off mood, with the market giving more attention to the stronger dollar and swelling USA inventories rather than growing tensions between Saudi Arabia and Iran.

North Korea’s announcement that it had successfully tested a hydrogen nuclear device added to geopolitical worries stirred by a row between Saudi Arabia and Iran.

Elsewhere in North Asia, South Korea’s KOSPI and the won both fell on suspicions North Korea had conducted a nuclear test on Wednesday morning, which Pyongyang later confirmed.

The Dow Jones industrial average fell 206.23 points, or 1.2%, to 16,952.43, the S&P 500 lost 21.13 points, or 1.05%, to 1,995.58 and the Nasdaq Composite dropped 36.91 points, or 0.75%, to 4,854.53 MSCI’s World index of developed market stocks hit a 3-month low and emerging market shares were at their lowest since mid 2009. The Standard & Poor’s 500 index rose three points, or 0.1 percent, to 2,015.

Japan’s Nikkei extended early losses to 1.4 percent at one point on the news but was off 1 pct by afternoon.

Global benchmark Brent crude LCOc1 fell more than 6 percent to $34.15 a barrel and US crude futures CLc1 were down 5.9 percent at $33.85.

The new year got off to an inauspicious start on Wall Street as stocks tumbled Monday in a global sell-off triggered by new fears of a slowdown in China and rising tensions in the Middle East.

Most Asian stock markets inched higher Tuesday as China’s benchmark stabilized a day after plunging almost 7 percent.

THE QUOTE: Scott Wren, senior global equity strategist for the Wells Fargo Investment Institute, said China’s transition to a service economy is not failing.

Trader Tommy Kalikas works on the floor of the New York Stock Exchange, Wednesday, Jan. 6, 2016. Investors tend to park money in USA government bonds when they are fearful of weak economic growth or turbulence in stocks and other markets.

Oil prices also took another hit on Wednesday.

In other energy trading in NY, wholesale gasoline rose 2 cents to $1.291 a gallon, heating oil rose a quarter of a cent to $1.126 a gallon and natural gas edged down 0.3 cent to $2.334 per 1,000 cubic feet. Australia’s S&P/ASX 200 retreated 1.2 percent to 5,123.10. Hong Kong’s Hang Seng shed 1 percent. At the Consumer Electronic Conference, the streaming video company said its service is now available in every country in the world except for China, Syria, North Korea and Crimea.

Another index, the CSI 300, fell 7.2 percent.

The chain also said it received a federal grand jury subpoena in conjunction with a criminal probe into an August 2015 norovirus outbreak in a California restaurant. Britain’s FTSE 100 fell 1 percent.

Chipotle also disclosed that sales at restaurants open at least one year plunged 30% in December in the wake of an E. coli outbreak that affected dozens of restaurants and a norovirus outbreak in one location in MA. Consol Energy sank 87 cents, or 10.2%, to $7.66, and Apache slid $3.94, or 9.1%, to $39.59.

CURRENCIES: The dollar slipped to 118.45 yen from 119.13 yen in the previous day’s trading. The euro weakened to $1.074 from $1.0744. Gold, which tends to rise during times of fear, jumped 1.4% to $1,093 an ounce. Copper was up a penny to $2.09 per pound.