West Texas Intermediate, the US benchmark crude, ended trading at $33.97, the lowest since 2009.
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“We’re headed for a nasty sell-off”.
If there is any more detail around what Janet Yellen means by a “gradual” path for future interest rate increases, that will definitely have implications for equity markets over the course of the year, said Mr. Lafferty. “They’re trading on fear that Chinese growth is going to collapse and that these lower oil prices are going to lead to a growing number of defaults in the high-yield bond market”.
The Dow Jones industrial average dropped 177 points, or 1 percent, to 16,981 as of 11:37 a.m. Eastern time.
Sydney – where several firms with trade links to China are listed – lost 1.5% and Seoul was 1.1% off. Japan’s Nikkei 225 index lost 1% and South Korea’s Kospi fell 0.3%.
Smith & Wesson rose $3.13, or 13.4 percent, to $26.41 and Sturm Ruger added $5.21, or 8.5 percent, to $66.60.
The Euro Stoxx 50 index of eurozone bluechip stocks slid 0.83 percent, while the Stoxx Europe 50 index, which includes some major United Kingdom companies, slipped 0.79 percent. Stocks have spent most of the day lower but haven’t sustained big losses. Wal-Mart Stores Inc. (NYSE:WMT) edged up slightly Wednesday morning.
BONDS: Bond prices rose and the yield on the 10-year Treasury note fell to 2.19 percent from 2.24 percent. Gold has gained more than 2.5 percent since the start of the year. It indicated that businesses were confident enough during the holiday shopping season to take on more workers during the height of the holiday shopping season. This would leave the currency well positioned to benefit from any softer United States data flow or rise in risk aversion.
Adding to worries about China, Chinese share prices .CSI300 plunged 7 percent soon after the open, leading to a nation-wide trading halt for the second time this week. Australia’s S&P/ASX 200 retreated 1.3 percent to 5,117.90. But China’s mainland Shanghai Composite Index advanced 74 points, or 2.25 percent, after the government intervened to prop up shares.
Yen buying started after China’s central bank set the yuan at a much weaker level than Tuesday’s close, a move that sparked fresh speculation that Beijing wants a weaker yuan as its economy loses momentum.
China also continues to experience financial turbulence.
Investors were partly spooked by this Friday’s expiration of a ban imposed in July on certain investors selling stocks.
“A weaker yuan could initiate other Asian markets to allow their own currencies to weaken to remain competitive with Chinese exports”, said Nescyn Presinede, a trader at Rizal Commercial Banking Corp., which manages $1.8 billion in trust assets.
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Oil prices settled at their lowest point of the current crude crash on Tuesday, falling to just under $34 per barrel on Wednesday after a government report showed massive, unexpected surge in gasoline inventories Wednesday. A rift between Saudi Arabia and Iran over the Saudi execution of a Shi’ite cleric failed to boost prices this week, as it appeared to put an end to speculation that OPEC members could agree on production cuts to lift prices.
