US stocks end sharply lower on oil, China fears
AFP
January 16, 2016, 8:59 am
US stocks sink 2% as global selloff spreads
New York (AFP) - Wall Street stocks finished decisively lower Friday following a bruising session dominated by worries about tumbling oil prices and the slowing Chinese economy.
But shares finished well off their lows for the day. The Dow Jones Industrial Average dropped 390.97 points (2.39 percent) to 15,988.08, after getting as low as 15,842.11.
The broad-based S&P 500 shed 41.55 (2.16 percent) to 1,880.29, while the tech-rich Nasdaq Composite Index tumbled 126.69 (2.74 percent) to 4,488.42.
Stocks were in the red the entire session, and the Nasdaq losses topped 4.0% at one point.
The Wall Street selloff came after European bourses took their cue from a 3.6 percent drop in the Shanghai stock index and pushed sharply lower.
Adding to the negative sentiment was a drop to a fresh 12-year low in US oil prices and earnings from banking giant Wells Fargo and Citigroup that showed a worsening hit from bad loans tied to oil.
David Levy, portfolio manager at Kenjol Capital Management, said a three-day weekend in the US also led to more selling because of investor unwillingness to take additional risk before Monday's holiday commemorating Martin Luther King Day.
The widespread market losses over the start of 2016 has sparked talk of the potential for a global recession, which the market "certainly sees as a possibility," Levy said.
Banking stocks were battered, with Citigroup sinking 6.4 percent after it set aside $250 million in reserves for its energy portfolio and warned of a deeper hit if oil prices fall further.
Other banks also fell, including Bank of America, which lost 3.5 percent ahead of its earnings release Tuesday.
Dow member Intel plummeted 9.1 percent after reporting annual earnings of $11.4 billion, down about 2.6 percent from 2014. Analysts cited worries about declining personal computer sales and the chip maker's exposure to China.
Technology companies were generally lower, with Apple falling 2.4 percent, Microsoft 4.0 percent and Facebook 3.5 percent.
Dow member Disney fell 5.3 percent following a downgrade by Barclays due to worries about sports network ESPN's prospects.
Petroleum-linked shares were another weak sector. Apache tumbled 4.6 percent,
Marathon Oil 10.3 percent and Transocean 6.5 percent. US-traded Chinese companies fell. Alibaba lost 3.7 percent, Baidu 4.8 percent and JD.com 4.0 percent.
AFP
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