On the New York Stock Exchange, Dow members Chevron and ExxonMobil lost 3.2 per cent and 1.8 per cent, respectively, and Schlumberger fell 2.3 per cent.
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“The economic data we’ve seen and some mergers again this week – that’s painting a pretty good picture for equities, but investors are growing pretty skittish about maybe the ramifications of what happens when the Fed increases”, said Sean Lynch, co-head of global equity strategy for Wells Fargo Investment Institute.
Brent futures LCOc1 fell to an nearly seven-year low, while US crude futures CLc1 fell below $36 a barrel after the International Energy Agency said it expected the supply glut to worsen in 2016 as demand slows and OPEC shows no signs of slowing production. The Nasdaq composite (INDEXNASDAQ:.IXIC) lost 111.71 points, or 2.21 percent, to 4,933.
But instead, as fears of a policy error by the Fed grow amid a slowdown in USA manufacturing and other concerns, this rate hike turned into a negative event.
The selling was broad, with all 10 sectors of the Standard and Poor’s 500 index ending down.
In Europe, Germany’s DAX lost 2.4 per cent, Britain’s FTSE 100 dropped 2.2 per cent and France’s CAC 40 shed 1.8 per cent.
The most active gold contract for February delivery rose 3.7 USA dollars, or 0.35 percent, to settle at 1,075.70 dollars per ounce.
Investors were also anxious about declines in China’s yuan and in high-yield debt markets. A measure of volatility has jumped more than 60 per cent this week, on track for the most since August. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, plummeted by 10 basis points to 2.139 percent.
The Friday fall left all three with heavy losses for the week: The Dow was down 3.3 per cent, the S&P 3.8 per cent, and the Nasdaq 4.1 per cent. The low price has also decimated profits at energy companies.
Treasury yields traded lower, with the 2-year yield near 0.91 percent and the 10-year yield at 2.17 percent in late-morning trade. The stock is up 28 percent since the start of the year.
CHEMICAL MERGER: Dow Chemical and DuPont are giving up gains earlier this week after they confirmed their widely anticipated $130 billion deal to merge their businesses.
Among tech shares, Alibaba lost 5.4 per cent after announcing it would buy Hong Kong’s leading English-language newspaper. The euro strengthened to $1.0995 from $1.0939.
Wall Street closes a very tumultuous week lower as heavy pressure on oil coupled with lingering concerns about the global economy and emerging markets drove the Dow Jones Industrial Average almost 300 points lower and the Nasdaq Composite below 5000 for the first time in almost a month. In New York, heating oil plunged eight cents, or 6.5 per cent, to $1.146 a gallon, wholesale gasoline was little changed at $1.282 a gallon, and natural gas lost 2.5 cents, or 1.2 per cent, to $1.99 per 1,000 cubic feet. If you would like to discuss another topic, look for a relevant article.
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