Oil prices slump ahead of Iran return to market

“Energy plays Marathon (NYSE:MRO) and CONSOL (NYSE:C=” rel=”5906″ NYSE:CNX) were slammed, losing 8.45 and 6.1% respectively, as the price of oil fell below US$30 a barrel.

“We’re seeing the final capitulation”, said Tina Byles Williams, chief investment officer at FIS Group in Philadelphia, which oversees about $4.4 billion in assets under management.

Friday’s market slide was once again fueled by the crash in crude oil prices and China’s stock market tumbling into a bear market. The Dow and S&P 500 have now fallen almost 9 percent this year, while the Nasdaq is off 11 percent.

Despite oil prices hovering around new multi-year lows, analysts say that prices have not hit the bottom just yet, with demand likely to ease in coming weeks, especially with refiners beginning to shut for routine spring maintenance. Meanwhile, a measure of inflation before it reaches consumers declined in December. The Nasdaq fell 126 points, or 2.7 percent, to 4,488. Yields on 10-year Treasury notes fell below 2 percent as investors turned to safe havens and increasingly believe the Federal Reserve will halt plans to further raise its benchmark interest rate.

The Australian, New Zealand and Canadian dollars all sank against the USA dollar on the back of another slide in Chinese stock markets and the slide in oil. Stocks trimmed their losses in the last hour of trading, but remained sharply lower.

BHP shed 6.4 percent, one of the biggest decliners on the pan-European FTSEurofirst 300 index, which closed down 2.79 percent.

All 10 major S&P sectors were in the red and all 30 Dow components lower.

“Investors are scared to death”, said Phil Orlando, chief equity strategist at Federated Investors in NY.

Wells Fargo (NYSE:WFC) were 3.5% lower at $48.89 after the bank posted a profit that was flat as low oil prices hurt the country’s fourth-largest bank by assets.

“It’s not giving anyone any confidence because to me at least it resembles a bad reality show on television”, he said. The Dow Jones Industrial Average fell 392 points, or 2.4%, to 15,987.

The Dow slumped 392 points or 2.39 percent while the S&P 500 lost 42 points or 2.18 percent.

BONDS AND CURRENCIES: Bond prices rose.

In China, the Shanghai Composite Index slid 3.6 percent to its lowest close in 13 months.

On Friday, light, sweet crude for February delivery was down $1.78 to $29.42 a barrel on the New York Mercantile Exchange, the lowest since November 2003.