Wall St. sinks as oil hits new lows

(Closed): US markets were flat on Tuesday, their first trading session of the week, as oil continued to drag energy stocks down.

The price of crude oil sank another 5 percent, and investors worry that the global glut in crude will cause deep damage to oil and gas companies and lead to more bankruptcies and layoffs. Morgan Stanley Inc. shares jumped after quarterly earnings came in above analysts’ expectations.

The Nasdaq Composite index was down 123.36 points, or 2.76 percent, at 4,353.59. The Dow Jones Industrial Average decreased 373 points, or 2.33%, to 1,5642.07.

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Michael Capolino, right, works with fellow traders on the floor of the New York Stock Exchange, Wednesday, Jan. 20, 2016. The Hang Seng China Enterprises Index is down 14 percent this year.

The S&P 500 has fallen 8 percent so far this year, losing more than $1.4 trillion in value, according to Thomson Reuters data. USA crude oil dropped 7.3% to $US26.238 a barrel, bringing its 2016 loss to almost 30%. Lower growth forecasts from the International Monetary Fund compounded anxiety over a weaker Chinese economy.

Safe-play stocks like utilities and telecommunications companies rose the most.

The Nasdaq is down 530.46 points, or 10.6 per cent. Chevron dropped 5.9 percent and Exxon 3.1 percent. The Nasdaq is down another 3.1%.

PUMPED UP: Nutritional supplement retailer GNC Holdings said its adjusted profit for 2015 will be at the high end of its previous estimates. Results were boosted by a 42 percent drop in fuel expenses. Stock corrections have only been that close together on three other occasions in history: in 1929, when the US entered the Great Depression; in 2000, around the time the dot-com bubble burst and the country entered a brief recession; and in 2008, when the world was in the midst of the financial crisis.

Treasury yields held lower, with the 2-year yield near 0.83 percent and the 10-year yield at 1.98 percent, as of 9:47 a.m. ET.

“Oil prices likely have to stabilize for the market to do the same”, Liz Ann Sonders, vice president and chief investment strategist at investment and brokerage firm Charles Schwab & Co., wrote in a research note Tuesday, noting that oil’s descent has reached “historical extremes” in terms of year-over-year declines and peak-to-trough declines.

“I don’t think that the rest of the market is headed for a bear market, but certainly there’s a bear grip that could take us down another 3-4 percent in the S&P 500”, Cardillo said.

CURRENCIES: The dollar declined 0.9 percent to 116.53 yen. In Europe, Germany’s DAX tumbled 2.8 percent and France’s CAC-40 shed 3.4 percent.

Building Permits fell 3.9 percent in December. The euro fell to $1.0907 from $1.0923.