Fear is once again gripping USA markets – and crude oil and China remain the major culprits.
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OIL prices plummeted to $29 a barrel on Friday on the likely resumption soon of Iranian oil exports into an already flooded market as worldwide sanctions against Iran are lifted, dragging equity indices around the world sharply lower.
The market has been on a stomach-churning ride since the start of the year, wrenched up – but mostly down – because of alarm over a slowdown in China and the plunging price of oil to its lowest level in 12 years.
US markets got clobbered on Friday, with the Dow Jones Industrial Average and S&P 500 dropping a combined 434 points. The S&P 500 is poised for a 2.5% slide and the Nasdaq could lose 3%.
The Dow industrials and the S&P 500 are down almost 9% so far this year, while the Nasdaq is down 11%.
Crude oil has dropped below $30 a barrel from a high of over $100 during the summer of 2014, eviscerating energy company profits. Brent crude, a benchmark for global oils, fell $1.94, or 6.3 percent, to $28.94 a barrel in London.
All 30 stocks in the Dow lost ground.
Other factors included lackluster United States retail sales in December and disappointing corporate earnings. The Russell 2000 small-cap index fell as much as 3.5 percent to its lowest since July 2013. Meanwhile, a measure of inflation before it reaches consumers declined in December. It fell $2.98 to $29.76.
EUROPE: Stocks opened higher in Europe but quickly fell.
Analysts also cited a 3.6 percent drop in the Shanghai stock index, raising further worries about the world’s second-biggest economy.
Other media and technology stocks taking a beating included Lionsgate (-5.1%), AMC Networks (-4.5%), Viacom (-4.5%), Facebook (-4.2%), Netflix (-4%), DreamWorks Animation (-4%), Tribune Media (-3.9%), Apple (-3.6%), Discovery Communications (-2.7%), CBS (-2.7%) and 21st Century Fox (-2.6%). China’s official Xinhua News Agency reported that banks’ new loans during the last month fell over a year earlier, in a sign that momentum for the credit that fuels economic growth was slowing.
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That weighed on the chip index, which fell 5.8 percent, its steepest drop since March. Japan’s Nikkei 225 lost 0.5 percent and South Korea’s Kospi slid 1.1 percent. The euro rose to $1.0955 from $1.0862, while the dollar fell to 116.77 yen from 118.15 yen.
