Financial Markets: A dismal start for stocks gets even worse
NEW YORK >> Stocks plunged on Wednesday, bringing the Standard & Poors 500 Index into a 'correction,' down 10 percent from its November peak.
A plunge this big, known as a market "correction" on Wall Street, last occurred in August.
Energy and consumer stocks bore the brunt of the selling. With crude oil trading near $30 a barrel, many fear more oil and gas companies will go bankrupt, according to the Chicago Sun Times.
Netflix and Amazon, both of which doubled in value in 2015, were hammered.
The Dow Jones industrial average fell 364 points, or 2.2 percent, to 16,151. The S&P 500 lost 48 points, or 2.5 percent, to 1,890. The Nasdaq composite dropped 159 points, or 3.4 percent, to 4,526.
Stocks fell sharply in late afternoon trading with the selling concentrated on some of the biggest winners from last year like Netflix and Amazon.
Oil up, energy down
Energy companies continued to drop even as the price of oil had a rare up day. Traders are increasingly worried that a plunge in the price of crude to near $30 a barrel will lead to more strain, layoffs and bankruptcies for oil and gas companies.
"We're still waiting to see how earnings come out, and whether oil prices move back down again or stabilize here," said Ed Keon, managing director and portfolio manager for QMA.
The price of oil ended slightly higher after a day of wavering between gains and losses. Benchmark U.S. crude edged up 4 cents to close at $30.48 a barrel in New York. It had been up more than 3 percent in the first hour of trading, but stumbled on a report showing that demand for fuels slipped last week. Prior to that, crude had fallen for the previous seven trading days. It's down 18 percent so far this year.
Brent crude, a benchmark for international oils, fell 57 cents, or 1.8 percent, to $30.31 a barrel in London.
Several oil and gas companies fell sharply as crude prices wavered. Williams Cos. tumbled $2.58, or 15.6 percent to $13.95. Consol Energy slid 82 cents, or 12.2 percent, to $5.88. Valero Energy shed $6.39, or 9 percent, to $64.80.
Investors sold off shares in Ford Motor and auto parts supplier BorgWarner after both companies issued earnings outlooks that fell short of Wall Street's expectations. Ford fell 69 cents, or 5.3 percent, to $12.17. BorgWarner lost $3.89, or 10.4 percent, to $33.51.
Railroad operator CSX and supermarket chain SuperValu were down after the companies reported their latest quarterly results. CSX slid $1.60, or 6.8 percent, to $22.10.
MetLife climbed 3.3 percent after the company said it plans to sell or spin off a large part of its life insurance business. The stock gained $1.38 to $43.37.
In Europe, Germany's DAX fell 0.2 percent while France's CAC 40 rose 0.3 percent. The FTSE 100 of leading British shares gained 0.5 percent. In Asia, stocks rallied despite a 2.4 percent drop in the Shanghai Composite.
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