Tallahassee Journal

Dow slides 391; oil and China drops rattle investors

Dow slides 391; oil and China drops rattle investors

The market storm that has engulfed Wall Street to start 2016 again took aim at stock investors, with the Dow closing down nearly 400 points Friday, as increasingly jittery traders reacted to the latest swoon in oil prices and another big selloff in Chinese stocks. The massive selloff extended the U.S. stock market’s worst start to a year ever to 10 trading sessions. The slide is gaining steam amid raising investor fears of slowing global growth and even steeper losses in markets.GTY 460807224 A FIN MAX USA NY j

“Today hasn’t been an easy one in the markets for the faint of heart,” Terry Sandven, chief equity strategist for U.S. Bank Wealth Management, said. At the closing bell, the Dow Jones industrial average, which at one point was down nearly 537 points, was off 391 points, or 2.4%, to 15,988.08, and back to levels last seen in August. The Standard & Poor’s 500 index dropped 2.2% to 1880.20, after earlier falling below its August low of 1867.61, a key level Wall Street is watching and hopes will hold as it marked the bottom on the last correction. The Nasdaq composite index stumbled 2.7%. The S&P 500 is now down 8% in 2016 and the Nasdaq is off 10.4%

In a replay of other big down days so far in the new year, Thursday’s rebound on Wall Street turned out to be short-lived and heavy selling resumed Friday. Sparking the latest selloff was a 5%-plus slide in U.S.-produced crude that sent prices back down below the key $30 a barrel level. Adding to investor angst was another big stock market slide in mainland China, where the Shanghai composite slid 3.6%, putting it back in bear market territory, or more than 20% from its recent high. The latest sell-off is a sign that many investors, spooked by the ongoing bloodletting on Wall Street, are throwing in the towel and reducing their positions in stocks to pare risk. “It does feel a bit like capitulation before a near-term bottom right now,” Barry Bannister, chief equity strategist at Stifel.

The fact that Wall Street is closed Monday for Martin Luther King Jr. Day, was also cited as a reason for the heavy selling, as investors did not want to hold stocks over the long weekend, some Wall Street pros say. A top Wall Street executive warned that stocks could slide another 10% before ending the year up higher. BlackRock CEO and Chairman Laurence Fink in a Friday appearance on CNBC’s “Squawk Box” characterized the current financial conditions as “a real market decline, bordering on a bear market.”

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