USA stocks hit lowest levels since 2014 as oil prices slump

Strength a year ago in Netflix, Facebook and a handful of other technology stocks masked troubled sentiment in other components of the S&P 500, said R Squared portfolio manager Riad Younes. Benchmark U.S. crude for March delivery was down 12 cents to $28.23 a barrel in electronic trading on the New York Mercantile Exchange.

Kinder Morgan surged 15.6 percent as the pipeline company outlined plans to cut debt and spending, raising the chances of a higher dividend. Brent crude, a benchmark for worldwide oils, lost 2 cents to $27.85 per barrel in London. “There are no expectations of further policy action, but naturally the euro will be sensitive to hints of easing measures given the recent volatility in financial markets and weakness of the oil price”.

James Liu, global market strategist for JPMorgan Funds, said demand for oil hasn’t fallen off and the global economy remains relatively healthy. While companies started shutting down drilling rigs and wells in late 2014 after prices started to decline, production of oil didn’t change much.

ENERGY KEEPS FALLING: Energy stocks were pelted. Consol Energy and Southwestern Energy each soared 19 percent.

The Dow and S&P 500 are down 10 per cent so far in January; the Nasdaq is down 12 per cent. The losses were widespread; all 10 of the S&P 500’s industrial sectors were in the red.

Investors are also selling shares of companies that may have exposure to the oil industry, like certain banks.

BIG BLUES: Commercial tech giant IBM said its revenue fell for the 15th consecutive quarter.

Phil Flynn, a futures account executive with Price Futures Group, said in his daily energy report that the market was going through an “oil tantrum”, and investors’ fear is “becoming a self-fulfilling prophecy when we talk about economic growth”.

The National Association of Home Builders found that housing starts declined 2.5% in December to a seasonally adjusted annual rate (SAAR) of 1.149 million from an upwardly revised 1.179 million in November. The February contract, which expired Wednesday, dived 6.7 percent, or $1.91, to close at $26.55 in NY, which was USA oil’s lowest level since May 2003. Thursday’s economic data includes weekly initial jobless claims (expected 275K from 284K previously) and the Philadelphia Fed business outlook survey (expected -4.0 from -5.9 prior).

KEEPING SCORE: Tokyo’s Nikkei 225 rose 0.8 percent to 16,552.88 and South Korea’s Kospi gained 0.7 percent to 1,858.33.

PUMPED UP: Nutritional supplement retailer GNC Holdings said its adjusted profit for 2015 will be at the high end of its previous estimates.

Advancing issues outnumbered declining ones on the NYSE by 2,003 to 1,075, for a 1.86-to-1 ratio on the upside; on the Nasdaq, 1,508 issues rose and 1,292 fell for a 1.17-to-1 ratio favoring advancers.

With fourth-quarter reporting season under way, S&P 500 companies on average are expected to post 4.5-percent lower earnings, according to Thomson Reuters data.

Oil company profits are plummeting, so oil company shares are plummeting, and that is dragging down the whole market.

FEELING BETTER: Health care stocks also traded higher. On Wednesday they fell $6.49, or 6 percent, to $101.40. “Nowhere more so than in Japan”, he said. The trial evaluated beloranib as a treatment for a rare genetic disorder that causes life-threatening obesity. Exxon dropped 5.9 percent and Chevron slumped 5.7 percent.

A late rally lifted stock prices from a nose dive Wednesday as the price of oil took its biggest one-day plunge since September.

ASIA’S DAY: Asia surrendered early gains to finish the day sharply lower. United rose 26 cents to $45.38. Frontier Communications added 11 cents, or 2.8 percent, to $4.05.