Specialist Robert Nelson works on the floor of the New York Stock Exchange. USA stocks are opening higher, led by gains in big technology companies, which have had a rough start to the year. It also deepens the pain for many investors after a flat year of returns for the stock market last year.
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S&P 500 e-minis were up 11.5 points, or 0.6 percent, with 240,419 contracts traded. That big a plunge is defined as a bear market.
“This is a market that’s been selling off very hard and is probably short-term oversold”, said Alan Gayle, a senior strategist for Atlanta-based Ridgeworth Investments, which has about $42.5 billion in assets. “That’s the debate. Are we gaining the momentum in the economy to justify the valuation in the market?” The uncertainty over oil prices caused energy stocks in the S&P 500 to decline 2 percent Wednesday. That trend didn’t last, as oil prices turned lower once more, weighing on energy stocks. Urban Outfitters advanced 93 cents, or 4.2 percent, to $22.85.
Mr Michael James at Wedbush Securities said the market was reading economic weakness, and not just excess supply, into the weak crude prices.
WALL STREET: The Dow lost 364.81 points, or 2.2 percent, to 16,151.41 on Wednesday. The Standard & Poor’s 500 index lost 24 points, or 1.2 percent, to 1,965.
The MSCI Emerging Markets Index rebounded 1.3% from the lowest close since 2009, trimming the worst start to a year since 1998. The Nasdaq composite slipped 16 points, or 0.4 percent, to 4,669.
The S&P 500 is down 153.66 points, or 7.5 percent.
The turnaround helped snap an eight-day trading slump for the Nasdaq composite, which is heavily weighted with technology stocks. Both Sturm Ruger and S&W were up more than 10 percent over the first two trading days of 2016 leading up to the expected announcement.
Alcoa sank 9% after the aluminium manufacturer’s earnings included revenue that fell short of Wall Street’s expectations. The MSCI All-Country World index rallied with USA equities, rising 0.3 percent after a six-day plunge that has left it down 6.3 percent this year. Having been alarmed by a near 5-percent slide in the currency since August, investors appeared relieved by the relative calm.
Brent oil dropped below $30 a barrel for the first time since April 2004 on speculation Iranian shipments will soon climb. The aluminum producer slid 9 percent Tuesday amid a drop in sales, even after it predicted a shortfall in supply of the metal this year.
Several mining companies also fell along with the price of copper. Consol Energy shed 30 cents, or 4.3%, to 6.70.
EYES ON CHINA: China’s exports rose 2.3 percent in December from a year earlier in yuan terms, reversing a 3.7 percent drop in November. High-yielding currencies gained, with the Australian dollar strengthening at least 0.5%.
Elsewhere, Australia’s S&P/ASX 200 rose 1.3 per cent, while Japan’s Nikkei Stock Average rallied 2.9 per cent.
“I think 2016 will be a more challenging year for global markets”, said Mr. Markham, noting that valuations in the U.S. are quite high, and “the unconditional support from central banks which we’ve had, certainly in the USA, has come to an end”.
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Earnings news may attract some attention on Thursday, as financial giant JP Morgan (JPM) is due to release its fourth quarter results before the start of trading.
