USA stocks are sharply lower, led by steep declines in energy companies as the price oil takes another tumble.
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All three major stock indexes – the Dow, the Nasdaq composite and the Standard & Poor’s 500 – are now in what’s known as a correction, or a drop of 10 percent or more from their recent peaks.
First, there has been a five-year bull market, with stock prices almost tripling between the dark days of February 2009 and the market peak of February 2015.
Brent crude prices, which have fallen 20 per cent this year, were down almost 5 per cent as the market braced for oil from Iran to flood an already oversupplied market. Benchmark U.S. crude fell fell $2.01 to $29.19 per barrel, a 6.4 percent loss, after hitting a contract low of $29.13, its lowest since November 2003. Commodities have been in selloff mode since the beginning of the year on oversupply concerns and demand worries. “When we get a few cases of bad news, especially when it’s in different segments of the market, it can accelerate concern”.
Dow components Exxon and Chevron were down 3-4.5 per cent, while Caterpillar dropped almost 4.5 per cent.
Asian stock markets closed lower after China’s Shanghai Composite Index dropping 3.6% to enter bear-market territory.
“The gyrations of the stock market could impede the strength of the domestic market if this turns into a full-blown meltdown”, Clinch said.
“If these weak data keep going into 2016, the outlook is going to grow even dimmer given the recent financial market turbulence and the fears over what a slowdown in China means for the rest of the world”, he said.
Consumer confidence so far this month is up slightly from December, according to preliminary data released Friday from Thomson Reuters and the University of MI. The government said on Friday that USA retail sales dipped in the critical month of December. Excluding gas, retail sales were flat.
The broader Topix declined 0.3 percent for the day to 1,402.45 and the JPX-Nikkei Index 400 declined 0.3 percent to 12,625.86.
A separate report from the New York Federal Reserve showed a significant contraction in regional manufacturing activity in January. Sentiment climbed to 93.3 from 92.6 in the preliminary reading, its fourth straight monthly increase. His comments suggested the Fed could still be on track for four rate hikes this year after initiating its first in almost a decade last month. Walmart (WMT) is firing 16,000 workers and closing 269 stores globally. The vertigo hasn’t been worse since S&P downgraded USA sovereign debt in August 2011.
The CBOE volatility index jumped as much as 29.2 percent to 30.95, it’s highest since September.
But shares finished well off their lows for the day.
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Results from Fastenal (NASDAQ:FAST) missed estimates, sending shares in the nuts & bolts maker tumbling 6.4%. You could see that optimism in the steady rise in the ratio of stock price to company earnings, which rose noticeably above historical averages. Now, see where he invests his money and why Wells Fargo is a core holding of his multi-million dollar portfolio.
