Producers in the US and overseas haven’t cut back their output much, despite the low prices, and now the lifting of worldwide sanctions against Iran could send more oil flowing into markets that are already awash in crude. While the Dow and its index peers made a valiant late-day comeback attempt, they still ended in the red, with the S&P 500 Index (SPX) and Nasdaq Composite (COMP) marking their lowest settlements in more than a year. Benchmark U.S. crude for March delivery was down 30 cents to $28.05 a barrel in electronic trading on the New York Mercantile Exchange.
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The Dow was down 422 points, or 2.6 percent, to 15,590 as of 11:45 a.m. Eastern time.
The S&P 500 closed down 22 points, or 1.19 percent. Hong Kong’s Hang Seng retreated 3.8 per cent. The Shanghai Composite Index lost 1 per cent. In Europe, Germany’s DAX tumbled 2.8 per cent and France’s CAC-40 shed 3.4 per cent. Britain’s FTSE 100 sank 3.1 per cent.
In economic news, the Consumer Price Index for all urban consumers declined 0.1 percent in December on a seasonally adjusted basis, the U.S. Labor Department said Wednesday.
As global stocks slid and the US dollar weakened, gold emerged as a popular choice for risk-averse investors.
“When the market is this bad, it’s reasonable to say it might be telling you something, but it’s also reasonable to say maybe it’s not”, Dimon told CNBC-TV while attending the annual World Economic Forum in Davos, Switzerland. The S&P 500 (SPX), plotted here on the thinkorswim® platform, moved below support at 1835, and a former intraday low of 1821, trading to a session low of 1812 in Wednesday’s session through midday. Concerns about China’s prospects, as well as the drop in oil prices and signs of weakness elsewhere, have affected global markets in recent months. Americans saved 5.5 percent of their incomes in November, up almost a full percentage point from a year earlier. The Dow Jones average looks like it will open at around 15,736, some 270 points lower than last night’s close.
“The first couple of weeks of the year have been hard from a market perspective, and the last half of the year and continuing the dramatic decline in commodity prices broadly has been disruptive to the market”, Goldman Sachs chief financial officer Harvey Schwartz said on a call with analysts to discuss the company’s earnings this morning. The S&P 500 rose one point to 1,881.33.
Tokyo’s Nikkei 225 lost 2.4 per cent to 16,017.26 and South Korea’s Kospi inched down 0.3 per cent to 1,840.53.
Brent crude, a benchmark for worldwide oils, fell 88 cents, or 3.1 per cent, to $27.88 a barrel in London.
European stocks edged higher ahead of a central bank meeting Thursday while Asian markets fell, surrendering early gains as oil drifted down and sentiment remained fragile. Investors are also anxious that cheap oil signals something very negative about the health of the global economy. He said production will keep falling and oil prices will stabilize in the middle of 2016, then start rising. The IMF downgraded the outlook for developing economies to 4.3 percent growth from 4.5 percent in October. Exxon dropped 4.21 percent and Chevron slumped 3.10 percent. The yield on the 10-year Treasury note fell below 2 percent, which is generally considered a key psychological milestone for investors.
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The dollar fell to 116.72 yen from 117.44 yen late Tuesday.
