S&P 500 enters a 2nd correction as oil plummets

Stocks on Wall Street closed lower after a shortened session Friday, bumping the benchmark S&P 500 index into a correction, or a drop of 10%, below its most recent all-time high in September.

Energy companies led the market slide as the price of U.S. crude oil tumbled to its lowest level in more than a year, reflecting worries among traders that a slowing global economy could hurt demand for oil.

“Oil is really falling sharply, continuing its downward descent, and that appears to be giving investors a lot of concern that there’s slowing global growth,” said Jeff Kravetz, regional investment director at U.S. Bank Private Wealth Management. “You have that, and then you have the recent sell-off in tech and in retail, and then throw on there trade tensions and rising rates.”

Losses in technology and internet companies and banks outweighed gains in healthcare and household goods stocks. Several big retailers declined as investors monitored Black Friday for signs of a strong holiday shopping season.

All major equity benchmarks were lower. The S&P 500 index lost about 3.8% for the week, its worst Thanksgiving week performance since 1939. Energy was by far the worst-performing group on Friday, with companies including Devon Energy Corp. and Marathon Oil Corp. losing at least 4%. West Texas intermediate crude, the U.S. benchmark, slid 6.3% to $51.20 a barrel — the lowest price since October 2017 — and is down 33% since hitting a four-year high of $76.41 last month.

The break in petroleum prices only adds to the list of issues investors will be weighing going into next week, including trade wars and whether the economic expansion will continue.

“There’s a lot of uncertainty to still churn through,” said Noah Weisberger, chief U.S. strategist at AB Bernstein. “I’m a little bit surprised, you know, going back to October, that it’s taken the market as long as it has — it still hasn’t regained its footing.”

Experts say the U.S. is increasing pressure on Saudi Arabia and OPEC not to cut production, as the Saudis had indicated they would, at their meeting on Dec. 6. President Trump may have some influence by declining to sanction Saudi Arabia over the death of dissident journalist Jamal Khashoggi. With oil supply already ample, that could push prices down further.

Among energy stocks, Chevron dropped 3.4% to $113.60.

Technology stocks also weighed on the market, with Apple down 2.5% to $172.29.

Tesla fell 3.7% to $325.83 after the electric-auto maker said it intended to cut prices for its Model X and Model S cars in China to make them more affordable.

Traders had their eye on retailers as Black Friday, the traditional start to the crucial holiday shopping season, began. Shares in L Brands, operator of Victoria’s Secret and Bath & Body Works, added 2% to $29.97. Other retailers put investors in a selling mood. Kohl’s fell 3.7% to $63.83, while Target lost 2.8% to $67.35 and Macy’s dropped 1.8% to $32.01.

The S&P 500 index fell 0.7% to 2,632. The index is now down 10.2% from the record high set Sept. 20. The last time the index entered a correction was in February.

The latest correction comes as investors worry that corporate profits, a key driver of stock market gains, could weaken next year.

The Dow Jones industrial average dropped 0.7% to 24,285. The Nasdaq composite fell 0.5% to 6,938. The Russell 2000 index of smallercompany stocks picked up 0.03% to 1,488.68.