Stocks plunged in early Wall Street action on Wednesday, dragged down by concerns of a worldwide economic slowdown.
The Dow Jones Industrial Average plummeted more than 500 points Wednesday afternoon and investors quickly retreated to so-called safe havens. The S&P; 500 was down 53.24 points, or 2.83 per cent, at 1,828.09, within touching distance of its October 2014 low. Energy companies led the way lower with a drop of 4 percent.
Continued downward pressure on oil prices has hit equities hard in recent weeks.
The International Energy Agency said Tuesday that oil prices would likely slide further this year as the market adjusts to the extra oil from producers such as Iran.
See the following visualizations to highlight the YTD performance of the Dow, the 1-year returns of the United States market indices, NYMEX WTI crude oil futures, and the current day performance of IBM.
Oil prices are down-way down. Brent crude prices were also down in midday trading and were on pace to hit their lowest levels in more than a decade.
Weekly oil inventory data from the American Petroleum Institute was due out at 4:30 p.m.
Sluymer pointed out to clients that even though the market is oversold and beaten down, the S&P; 500 "has yet to show any meaningful evidence of bottoming".
USA stocks pared some of their declines in afternoon trading.
The Standard & Poor's 500 index rose one point to 1,881.33. Permits to build new homes, meanwhile, slipped 3.9% to an annualized rate of 1.23 million units, a smaller decline than the 1.20 million units expected. Economists projected a 0.2 percent increase. The company traded at the volume of 1.85 million whereas, its Average trading volume (over the course of 30 days) is 2.36 million. The Shanghai Composite Index lost 1 percent to 2,976.69 and South Korea's Kospi was off 2.3 percent at 1,845.45. Investors say weakening global demand for oil, so vital to construction and manufacturing, could point to a broader underlying danger of slowing global growth.
The three-month annualized change in retail sales with gasoline sales stripped out, was 2.4% last month, the lowest reading since February, the team noted, while retail inventory accumulation was twice that.
"This is a different kind of dollar strength altogether... this is quite clearly being driven by declining risk appetite, higher market volatility and lower commodity prices", said Aroop Chatterjee, a director of research at Barclays in London. If consumers are spooked into spending less each month, then US gross domestic product will suffer and fears of a recession will become a self-fulfilling prophecy.
