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Overnight Markets: Wall Street tumbles as oil prices sink
The S&P 500 ended down 1.17%, its lowest close since October 2014.
Wall Street declined further on Wednesday, with the Standard & Poor’s 500 Index reaching a 21-month low, amid skepticism about the strength of the global economy intensified and as US oil prices plummeted to 2003 lows.
The S&P 500 ended down 1.17% at 1,859, its lowest close since October 2014. It had fallen as low as 1,812. The Dow Jones industrial average ended 1.56% lower at 15,767 points. After a brief late-day rally into positive territory, the Nasdaq Composite lost steam and ended down 0.12% at 4,472.
The equities rout was widespread, with the energy sector leading the losers. Exxon (XOM.N) dropped 4.21% and Chevron (CVX.N) slumped 3.10%. Devon Energy Corp. fell 8.1%, while ConocoPhillips and Halliburton Co. declined more than 4.4%.
US crude sank 6.6% yesterday amid a supply glut, but a late-day bounce in the oil prices helped reduce losses in stocks.
International Business Machines Corp. (IBM.N) weighed the most on the Dow, falling 4.88% after disappointing earnings report.
Banks fell for a third day with Citigroup Inc. and Bank of America Corp. down more than 3.4%. Charles Schwab Corp. decreased 4.7%.
Consumer discretionary companies, one of the few industries to finish with gains on Tuesday, erased the advance yesterday, falling 1%. Wynn Resorts Ltd. fell 4.7%, paring an earlier 11% tumble. Netflix Inc. was little changed, after earlier losing 10%, despite better-than-expected growth in its subscriber base.
Data yesterday showed the cost of living in the US fell in December, led by a slump in commodities that’s roiling global markets. A separate report showed new-home construction unexpectedly declined in December, indicating the industry lost some momentum entering 2016.
In Asia, shares rebounded on Thursday in morning trade amid speculation the selloff that took global equities to the brink of a bear market may have gone too far.
MSCI’s Asia Pacific Index climbed 0.7% as of 10:53 a.m. Tokyo time. Japan’s Topix index rose 1% after sliding 3.7% last session, while the Nikkei 225 Stock Average rose 1.4%. Australia’s S&P/ASX 200 Index jumped 1%, while the Kospi index in Seoul rebounded 0.5%.
In China, the Shanghai Composite Index slipped 0.9% despite a drop in money-market rates as the People’s Bank of China injected the most cash via open-market operations since 2013. In Hong Kong, the Hang Seng Index rose 1.2%.
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by Gavin Lumsden on Oct 26, 2016 at 14:01