(Reuters) – Wall Street bled yesterday, with the S&P 500 sinking to its lowest since October 2014 as oil prices sank below $30 per barrel and fears grew about economic trouble in China.
Pain was dealt widely, with the day’s trading volume unusually high and more than a fifth of S&P 500 stocks touching 52-week lows. The major S&P sectors all ended sharply lower. The Russell 2000 small-cap index dropped as much as 3.5 percent to its lowest since July 2013.
The energy sector dropped 2.87 percent as oil prices fell 6.5 percent, in part due to fears of slow economic growth in China, where major stock indexes also slumped overnight. The energy sector has lost nearly half its value after hitting record highs in late 2014. “Initially when oil was down, the convenient line was ‘Well, it’s good for the other nine sectors’,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. “That tune has changed. Now, it’s a contagion to the other nine sectors. It’s a contagion to Main Street and Wall Street.”
The technology sector was the day’s biggest loser, sliding 3.15 percent as weak quarterly results from chipmaker Intel weighed heavily on chip stocks.
The S&P 500 has fallen about 12 percent from its high in May, pushing it into what is generally considered “correction territory.”
China’s major stock indexes shed over 3 percent, raising questions about Beijing’s ability to halt a sell-off that has now reached 18 percent since the start of the year.
The Dow Jones industrial average dropped 2.39 percent to end at 15,988.08 and the S&P 500 fell 2.16 percent to 1,880.33. The Nasdaq Composite lost 2.74 percent to 4,488.42.
For the week, the Dow fell 2.2 percent, the S&P 500 lost 2.2 percent and the Nasdaq dropped 3.3 percent.
U.S. stock exchanges will be closed on Monday in observance of Martin Luther King Jr. Day, while China’s equity markets will be open.
