DOW DOLDRUMS AS MARKET DIVES ANOTHER 252 POINTS
Wall Street has worst three-day stretch to open year since ’08
NEW YORK The U.S. stock market posted another turbulent session Wednesday as investors got blindsided by yet another earlyyear shock: claims from North Korea that it successfully tested a powerful hydrogen bomb.
The new year has been awful so far, with the Dow logging its worst three-day opening stretch since the financial-crisis days of 2008.
The Dow Jones industrial average ended down 252 points, or 1.5%, as the blue-chip index fell about 93 back below the 17,000 mark for the first time since mid-October. The broader Standard & Poor’s 500 closed down 1.3% as it tumbled back below 2000 to 1990. The Nasdaq composite ended off 1.1%.
The news out of North Korea rattled investors around the globe. The latest geopolitical flare-up in an increasingly volatile world prompted investors to sell stocks and reduce risk.
The nuclear saber-rattling comes just days after the first shock of the year: a major plunge in shares of mainland China stocks and renewed global growth fears sparked by weak manufacturing readings in China and the U.S. A weaker-than-expected reading Wednesday on China’s services economy — which hit a 17-month low — added to worries about the global economy.
“We are just three days into the year and already global event risk is dominating the financial market landscape everywhere,” David Rosenberg, chief economist and stratetist at Gluskin Sheff said in a research note.
This is the latest setback for the stock market early in 2016, which kicked off Monday with the Dow’s worst opening-day decline since 2008 and the worst for the S&P 500 in 15 years.
Adding to the market’s woes Wednesday was another sharp drop in the price of a barrel of U.S.-produced crude, which plunged 5.5% to below $34 a barrel amid the growing worries related to slowing growth.
Wall Street also digested the minutes of the Federal Reserve’s December meeting, released Wednesday. At last month’s meeting the Fed hiked short-term interest rates for the first time since 2006. The minutes showed that hike was a “close call” and that Fed members agreed to move gradually on future moves.
Most on Wall Street are expecting two to three quarterpoint moves. But in an interview with CNBC, Fed vice chair Stanley Fischer said estimates of four Fed rate increases are “in the ballpark,” adding the forecast for just two hikes is “too low.”
Stocks in Europe also tumbled. The broad Stoxx Europe 600 index was off 1.4%, shares of Germany’s DAX were off 1.2% and the CAC 40 in Paris was 1.6% lower.
In China, the Shanghai composite rose 2.3% after slumping 6.9% Monday and 0.3% Tuesday.