Never hasWall Street had aworse start to a year
The alarm over a slowdown in China and plunging oil prices trip the global economy at the starting line.
The stock market capped the first two weeks of 2016 with a steep slide Friday that sent the Dow Jones industrial average down nearly 400 points.
All three major stock indexes — the Dow, the Nasdaq Composite index and the Standard & Poor’s 500 — are nowinwhat’s known as a correction, or a drop of 10 percent or more from their recent peaks.
Themarket has been on a stomach- churning ride since the start of the year.
It’s been 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. Investors are seeing damage to U. S. corporate profits, particularly at energy companies.
The Dow slid 390.97 points, or 2.39 percent, to 15,988.08 points. The average had been down more than 500 points early in the afternoon.
The S& P500 ended down 41.51 points, or 2.2 percent, at 1,880.33. The Nasdaq dropped 126.59 points, or 2.7 percent, to 4,488.42.
The Dow and S& P 500 have nowfallen about 8 percent this year, while the Nasdaq is off about 10 percent.
“Oil is the root cause of today,” said Dan Farley, regional investment strategist at the Private Client Reserve at U. S. Bank. “People are uncertain, and when they’re uncertain they’re scared.”
Crude oil has dropped below $ 30 a barrel from a high of over $ 100 during the summer of 2014, eviscerating energy company profits.
Benchmark U. S. crude fell $ 1.78, or 5.7 percent, to $ 29.42 a barrel inNewYork. Brent crude, a benchmark for international oils, fell $ 1.94, or 6.3 percent, to $ 28.94 a barrel in London.
On Friday, Williams Cos. led a slide among oil, gas and mining companies, falling $ 2.19, or 12 percent, to $ 16.10.
Investors also got some discouraging economic news Friday: The Federal Reserve saidU. S. industrial production, which includes manufacturing, mining and utilities, dropped in December for the thirdmonth in a row. And another government report indicated U. S. retail sales dipped last month.
Many investors had welcomed the new year with fairly high hopes. They expected oil prices would stabilize.
After a market correction in August, few forecasted it would happen again so soon. And the Federal Reserve’s move in December to raise interest rates for the first time in nearly 10 years signaled to many that the U. S. economy was healthy.
“The hope was global growthwould stabilize, and early in 2016 here, that has been a disappointment, too,” said David Chalupnik, head of equities at Nuveen Asset Management.
Despite the rough start to the year, Wall Streetwatchers are not ready to say that the bull market is over.
“We don’t believe we’re going into a bear market,” Chalupnik said. “The reason for that is theU. S. economy is sound.”
In China, the Shanghai Composite Index slid 3.6 percent to its lowest close in 13 months.