Stocks plunge along with price of oil; Dow off 500 points

Oil and gas companies led the way down Wednesday as sliding oil prices threatened even more damage to the battered energy sector. The IMF lowering its forecast for global growth this year to 3.4 percent, oil falling below $30 a barrel and China’s growth slowing to a 25-year low last year have all contributed to the sell-off this week.

Oil prices also didn’t fare so well, suffering their worst single-day drop since September and crude fell below $27 a barrel – the lowest price since 2003.

At 11:51 a.m. ET (1652 GMT), the Dow Jones industrial average was down 436.37 points, or 2.72 percent, at 15,579.65.

SEOUL, South Korea (AP) – Asian stocks snapped a losing streak in global markets Thursday after Wall Street trimmed losses and oil paused after a steep fall, but analysts said sentiment was fragile and more losses could be in store.

The broader Standard & Poor’s 500 index was off 22 points at 1,859. Brent crude, a benchmark for worldwide oils, lost $1.02, or 3.5 percent, to $27.4 a barrel in London.

The monthslong drop in oil prices and renewed uncertainty about the magnitude of the slowdown in China, the world’s second-largest economy, have dragged stocks sharply lower this year.

US stocks finished the day sharply lower on Wednesday, but the rout was nowhere near as bad as it could have been. 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.

KEEPING SCORE: In early trading, Germany’s DAX tumbled 2.8 percent to 9,388.41 and France’s CAC-40 shed 3.2 percent to 4,135.95.

While Sam Stovall, U.S. equity strategy at S&P Capital IQ, doesn’t think the global economy is headed for recession, the readjustment in the market’s valuation and falling prices was a combination that could cause fear-based selling to accelerate. The index briefly hit a low of 1,812.29, its lowest since February 2014.

The Dow has fallen 221.34 points, or 1.4 per cent. And the price of oil has now fallen so low that investors are also anxious that it could mean global economic growth is much weaker than expected, which could hurt all companies. Markets in Southeast Asia also retreated.

An unusually high 12.5 billion shares changed hands on USA exchanges, well above the 7.8 billion daily average for the past 20 trading days, according to Thomson Reuters data.

The price of gold rose $17.10, or 1.6 per cent, to $1,106.20. The yields fall as prices rise.

The dollar fell 0.8% against the yen.

MORE ENERGY: Wholesale gasoline dipped to $1.018 a gallon. Tullow Oil, which has a secondary listing in Dublin, was down more than 7 per cent, as was Providence Resources. Britain’s FTSE 100 sank 3.1 percent.