December 12, 2017
Wednesday, January 14, 2015

Wall Street ends down for 4th day on global growth worries

US stocks fell for a fourth day as a World Bank forecast fuelled concerns about global economic weakness and copper prices sank, although a late-day rebound in energy shares left the market well off its lows after a volatile session.

The S&P energy index ended up 0.1 percent after falling as much as 2.6 percent. It rebounded late in the day as oil prices jumped by the most in more than two years ahead of options expiration. Crude oil prices remained near six-year lows despite the day's jump, however.

S&P 500 materials and financial sectors were the day's worst performers, both falling more than 1 percent.

The price of copper, a key industrial metal, touched its lowest in five and a half years, weighing on shares of producers including Freeport McMoRan Inc, after the World Bank cut its economic growth forecasts for this year and next.

Adding to investor concerns, US retail sales registered their biggest drop in 11 months in December The S&P retail index fell 0.8 percent.

The Dow Jones industrial average fell 186.59 points, or 1.06 percent, to 17,427.09, the S&P 500 lost 11.76 points, or 0.58 percent, to 2,011.27 and the Nasdaq Composite dropped 22.18 points, or 0.48 percent, to 4,639.32.

US crude oil settled up 5.6 percent and Brent ended up 4.5 percent, snapping a four-day slide.

The S&P 500 briefly broke below its 120-day moving average, a technical support level, and hit a new low for the year at 1,988.44. S&P e-minis also broke support and hit an intraday low for the year.

The S&P 500 is now 3.8 percent below the record high reached on Dec. 29.

Shares of copper producer Freeport McMoRan tumbled for a second day. Shares ended down 10.9 percent at $18.74 and the stock was the S&P 500's biggest percentage decliner.

Expectations for US fourth-quarter earnings have fallen sharply in recent months, with growth now estimated at just 3.6 percent compared with an Oct. 1 estimate for 11.2 percent, according to Thomson Reuters data.

JPMorgan Chase & Co, the biggest US bank by assets, ended down 3.5 percent at $56.81 after reporting a 6.6 percent drop in quarterly profit. Wells Fargo & Co shed 1.2 percent to $51.25 after posting quarterly results.

A large trade in the options on the S&P 500's tracking ETF suggested positioning for a further decline in the market within the next week and a half. A trader paid $1.23 a contract for 43,830 SPY puts at the $195 strike price, which corresponds to the 1,950 level on the S&P 500.

Declining issues outnumbered advancing ones on the NYSE by 1,856 to 1,238, for a 1.50-to-1 ratio on the downside; on the Nasdaq, 1,743 issues fell and 994 advanced for a 1.75-to-1 ratio favoring decliners.

The benchmark S&P 500 index posted 13 new 52-week highs and 29 new lows; the Nasdaq Composite recorded 39 new highs and 130 new lows.

About 8.1 billion shares changed hands on US exchanges, compared with the 7.1 billion average for the last five sessions, according to data from BATS Global Markets.

European shares sank in big volumes, knocked down by worries over the pace of global growth that were fuelled by grim US retail sales data and cuts to the World Bank's economic forecasts.

Shares in mining giants tumbled along with copper prices, down 6 percent as investors slashed their exposure to the industrial metal.

Glencore ended 9.3 percent down after hitting a record low and Anglo American fell 9 percent. Copper mining generated nearly two-fifths of Glencore's operating profit in the first half of 2014 and about a quarter of Anglo's.

Major oil producers also retreated on Wednesday, tracking a renewed drop in crude prices. Royal Dutch Shell shed 3.3 percent, BP fell 3.6 percent and Eni ended down 3 percent.

Although lower commodity prices should help support the economy in the long term and reduce input costs for companies in many sectors, investors fear the benefits of cheaper oil and metals will be offset by anaemic growth and potential deflation.

Shares briefly trimmed losses around midday after an adviser to Europe's top court said an ECB bond-buying programme was legal under some conditions, potentially smoothing the way for a widely anticipated QE package for the euro zone.

But stocks resumed their slide in afternoon trading, with the FTSEurofirst 300 index of top European shares ending 1.6 percent lower at 1,354.39 points. London's FTSE 100 , home to a number of major commodity players, dropped 2.4 percent.

Earlier Japan's Nikkei share average fell 1.7 percent as investors held back due to concerns over plunging oil prices. The Nikkei fell 291.75 points to 16,795.96, its lowest close since December 17.

Oil-related shares led the decline, with top refiner JX Holdings falling 4 percent in heavy trade and Showa Shell losing 2.8 percent. The broader Topix shed 1.2 percent to 1,357.98, and the JPX-Nikkei Index 400 fell 1.1 percent to 12,317.83.

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Tags:  Stocks  shares  FTSEurofirst  Nikkei  US  Dow Jones  

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