Stock market slides again; worst two-week start to a year

Gold futures on the COMEX division of the New York Mercantile Exchange rose Friday as the USA equities showed weakness. Behind the market swings are growing investor jitters about the slowdown in China’s massive economy, plunging oil prices and the implications those trends may have for US corporations.

Adding to the pessimism in the market, oil prices plunged further Friday, with both the USA oil and the Brent crude dropping over 5 percent to settle below 30 US dollars a barrel for the first time in 12 years.

The Dow Jones industrial average lost 390.97 points, or 2.4 per cent, to 15,988.08. The Nasdaq Composite lost 2.74 percent to 4,488.42. The Dow Jones industrial average was down more than 400 points, extending its losses for the year.

The current slide in stock prices, which on Friday briefly dragged the S&P 500 to levels not seen in more than a year, is reminiscent in breadth and tone of drop-downs seen during the Great Recession.

“We don’t believe we’re going into a bear market”, Chalupnik said.

Better than expected earnings reports weren’t enough to provide a boost to financial companies that are expected to be among the beneficiaries of the Fed’s first interest rate hike in nearly a decade. The stock fell $2.90 to $29.84.

Stocks opened higher in Europe but quickly fell.

US producer prices fell in December, the third straight month in decline, as tumbling energy prices continued to pressure inflation. The Commerce Department reported Friday that sales declined 0.1 percent for the month, as warm weather hurt winter clothing sales and cheap gas undercut gas station revenue.

The report said industrial production dropped by 0.4 percent in December after slumping by a revised 0.9 percent in November. Major oilers including Exxon Mobil (XOM), Royal Dutch Shell (RDS.A), BP (BP) and Chevron (CVX) were sharply lower, while the Energy Select Sector SPDR ETF (XLE) fell 3.9%.

Worries about slowing global growth have plagued stocks for months, but many analysts have maintained that the USA economy is relatively healthy, and recent declines in the stock market should stabilise.

ROUGH QUARTER: BlackRock dropped 5 percent after the investment firm’s fourth-quarter profit fell short of Wall Street forecasts. The S&P 500 broke through important technical support at the August low near 1,867 Friday and then proceeded to dive through the next important support level at 1,862, but the selloff “failed to go into beast mode”, Guilfoyle said in emailed comments.

The Shanghai index .SSEC closed Friday at its lowest level since December 2014, down more than 20 percent from its November high and almost 44 percent from its 2015 high. Germany’s DAX lost 2.5%, while France’s CAC 40 dropped 2.4%.

David Levy, portfolio manager at Kenjol Capital Management, said a three-day weekend in the U.S. also led to more selling because of investor unwillingness to take additional risk before Monday’s holiday commemorating Martin Luther King Day.

Bond prices rose. The yield on the 10-year Treasury note fell to 2.03% from 2.09% late Thursday.