Roller-coaster ride:

The Denver Post - - BUSINESS - By Mar­ley Jay

U.S. stocks bounced back to a loss of 249 points at clos­ing af­ter an open­ing plunge; oil fell below $27 a bar­rel.

U.S. stocks slumped Wed­nes­day as the price of oil suf­fered its worst one-day drop since Septem­ber. A huge sell-off ear­lier in the day pushed the Stan­dard & Poor’s 500 in­dex to its low­est level in al­most two years.

In­vestors are wor­ried that low oil prices mean there’s not that much de­mand for fuel. That would be a sign that growth in the global econ­omy is slow­ing down. Stocks in the U.S. started sharply lower, fol­low­ing wide­spread sell­ing over­seas, and at one point the Dow Jones in­dus­trial av­er­age fell as much as 565 points.

Af­ter a late re­cov­ery, the Dow closed down 249.28 points, or 1.56 per­cent, to 15,766.74. The S&P 500 in­dex fell 22 points, or 1.2 per­cent, to 1,859.33. The Nas­daq com­pos­ite, which briefly turned pos­i­tive in the af­ter­noon, lost 5.26 points, or 0.1 per­cent, to 4,471.69.

U.S. crude dropped $1.91 to $26.55 a bar­rel in New York. That was the big­gest one-day plunge for U.S. oil since Sept. 1. U.S. crude is down 28 per­cent in 2016 and is trad­ing at its low­est level since May 2003.

Brent crude, a bench­mark for in­ter­na­tional oils, fell 88 cents, or 3.1 per­cent, to $27.88 a bar­rel in Lon­don.

James Liu, global mar­ket strate­gist for JPMor­gan Funds, said de­mand for oil hasn’t fallen off and the global econ­omy re­mains rel­a­tively healthy. But com­pa­nies are still pro­duc­ing a great deal of oil, so stock­piles have ac­cu­mu­lated. While com­pa­nies started shut­ting down drilling rigs and wells in late 2014 af­ter prices started to de­cline, pro­duc­tion of oil didn’t change much.

Liu pre­dicted pro­duc­tion will keep fall­ing and oil prices will sta­bi­lize in the middle of 2016 then start ris­ing.

“I think that will al­le­vi­ate some mar­ket con­cerns,” Liu said.

Gold and U.S. govern­ment bonds, tra­di­tional safe havens, rose in value as in­vestors shifted money out of stocks.

Over­seas mar­kets also fell. Ja­pan’s Nikkei in­dex en­tered a bear mar­ket, down 20 per­cent from its peak in June, and Euro­pean bench­marks lost be­tween 3 and 4 per­cent.

BMO Pri­vate Bank chief in­vest­ment of­fi­cer Jack Ablin said he thinks stocks will fall a bit far­ther, but he doesn’t ex­pect a global col­lapse. Ablin said that for years, in­vestors bought stocks with­out too much re­gard for risk. He said in­vestors felt that if things ever got too bad, the Fed­eral Re­serve would help prop up the mar­ket.

“In­vestors were com­fort­able tak­ing out­size risks, not be­cause they had earn­ings to fall back on, but be­cause they had the Fed to fall back on,” Ablin said. So stocks made huge gains in the years since the fi­nan­cial cri­sis while the U.S. econ­omy churned out years of steady but un­spec­tac­u­lar growth.

Spe­cial­ist Charles Boed­ing­haus works on the floor of the New York Stock Ex­change Wed­nes­day. Low oil prices trig­gered a stock slump. Richard Drew, The As­so­ci­ated Press

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