Stocks plunge; S&P 500 is down 10 percent from November peak

An earlier version of this article incorrectly said all three major US indexes entered correction territory. If it closes down that much it would meet the standard definition of a market “correction”, something that last happened in August.

At 3:30 p.m.in NY, the Dow Jones Industrial Average (INDEXDJX:.DJI) was up 0.6% at 16,495.75. In Asia, China’s Shanghai composite closed 0.2 percent higher, recovering some of its losses from the day before.

Wall Street fell sharply on Wednesday as low oil prices weighed. Ipek Ozkardeskaya, analyst at London Capital Group, pointed out Goldman Sachs, which has a $20 target price for oil, is no longer the most bearish forecaster anymore.

Oil rose 0.7 per cent to $30.67 a barrel in NY, after its attempt to bounce back after tumbling below that level on Tuesday for the first time in 12 years was initially foiled. But then a report showed that demand for fuels slipped last month.

The turnaround helped snap an eight-day trading slump for the Nasdaq composite, which is heavily weighted with technology stocks. USA crude is down 18 percent so far this year.

Among energy companies, Williams Cos. tumbled $2.93, or 17.7 percent to $13.61. Starbucks was down 2.3 percent, Home Depot fell 4.5 percent and McDonalds was down 1.5 percent. Analysts estimate profits for S&P 500 members fell 6.7 percent last quarter.

Investors have been wrestling with fears about a protracted slowdown in China’s economy and the potential fallout for corporate earnings. Ford fell 65 cents, or 5.1 percent, to $12.20. Google parent Alphabet shares fell 3.5% and Facebook shares lost 4%.

EARNINGS UNDERWHELM: Railroad operator CSX and supermarket chain SuperValu were down after the companies reported their latest quarterly results.

Chevron was up 1.8 percent, giving the biggest boost to the Dow, while Exxon was up 1.5 percent.

The CBOE Volatility Index, often referred to as Wall Street’s fear gauge, fell 7.53 percent to end at 22.47 Tuesday.

DEAL PLANS: MetLife climbed 3.3 percent after the company said it plans to sell or spin off a large part of its life insurance business. If you look at just the top 10 negative starts, the average return for the year is a gain of 1.45 percent. While the French CAC 40 Index has surged up by 1.4%, the UK’s FTSE 100 Index and the German DAX Index are both up by 1.1%.

The U.S. benchmark index opened higher by 0.6 percent and saw gains fade in morning trading before the selloff accelerated following the European close.

DRIVING DIVIDEND: General Motors rose 0.9 percent after the automaker raised its dividend and added to its stock repurchase program. South Korea’s Kospi added 1.4 percent to 1,916.57.

“Lower prices in the overall market make people nervous”, said Keith Lerner, chief market strategist for SunTrust Bank, adding that some investors may be taking more conservative stances with their portfolios after watching stocks have a rough start to the year.

BONDS AND CURRENCIES: The yield on the 10-year Treasury note fell to 2.07 percent from 2.11 percent late Tuesday. The euro was little changed at $1.0857, and the dollar rose to 117.89 yen from 117.58 yen.

Around half an hour to the opening bell Dow Jones futures point to a near 140 point rally, to 16,425, while the S&P 500 and Nasdaq are also looking up for Tuesday.

In currencies, as investors moved back into riskier assets, the dollar gained 0.3% against the safe haven yen to ¥118.2690, while gold was down 0.4% at $1,080.80 a troy ounce after rallying in recent days.