US stocks slump ahead of Fed meeting

Specialist Jarret Johnson works at his post on the floor of the New York Stock Exchange, Friday, Dec. 11, 2015.

The stock market capped off its worst week since August Friday as oil prices set a new seven-year lows and investors braced for the increasing certainty that the Federal Reserve will boost short-term interest rates next week.

Short selling in the S&P 500 energy sector rose in November to its highest level in years, outpacing that of the benchmark S&P 500 index as crude oil prices continued to tumble amid a global glut, according to Markit data.

Higher interest rates in the US often trigger capital outflows in other markets with emerging markets expected to experience a big drain in investment as investors seek better yields. Though the drop in the oil price can help consumers and businesses by reducing energy bills, the recent decline has been weighing on stocks as investors worry it is a sign of a weak global economy.

“This transaction is a game-changer for our industry and reflects the culmination of a vision we have had for more than a decade to bring together these two powerful innovation and material science leaders”, Liveris said in a statement. “It’s kind of a depressing market”. The Dow fell 3.3 % and Nasdaq dropped 4.1 % for the week. Southwestern Energy plunged 14 percent.

EUROPE DOWN: Britain’s FTSE 100 dropped 2.2 percent.

Oil closed down 11% for the entire week after the Organization of Petroleum Exporting Countries’ decision to hold record production levels and the International Energy Agency warned of a slowdown in global oil demand.

For the week, the R&K 500 fell 3.8 % in its worst week since August 21.

The Dow Jones industrial average fell 309.54 points, or 1.76 per cent, to 17,265.21 with every component in the index ending down. The Nasdaq declined 111 points, or 2.2 percent, to 4,933.

Dow futures were down 0.9 percent while the broader S&P 500 futures shed 0.8 percent.

Atlassian Corp. (TEAM) rose 0.3%, extending gains after the enterprise software company on Thursday closed 32% above its IPO price (http://www.marketwatch.com/story/atlassian-closes-32-above-ipo-issue-price-2015-12-10). South Korea’s Kospi lost 0.2 percent, Hong Kong’s Hang Seng slipped 1.1 percent and mainland China’s Shanghai Composite lost 0.6 percent.

“It’s anticipation of the Fed, it’s oil, it’s credit … all of these factors are putting fear and confusion into the investor”, said Jonathan Corpina, senior managing partner at Meridian Equity Partners.

USA chemical giants DuPont and Dow Chemical officially agreed to merge in an all-stock deal to form a combined company valued at $130 billion.

In economic news, October U.S. business inventories was unchanged, while September’s figure was revised to 0.1 percent from 0.3 percent. Alibaba, in which Yahoo has a 15 percent stake, was down 4 percent at $80.88.

ASIA’S DAY: Japan’s Nikkei 225 index climbed 1 percent, but most other major indexes in Asia were down.

Legg Mason, BlackRock and Charles Schwab traded more than 3 percent lower in late-morning trade. The stock is up 26 percent since the start of the year.

Yahoo was down 3.4 percent at $33.43.