December 16, 2017
Tuesday, January 19, 2016

Wall Street falls; more carnage in oil stocks

A recent selloff on Wall Street deepened on Tuesday as US crude prices fell and an "in line" report showing slower growth in China failed to prop up an early rally.

Falling US crude prices pulled down materials stocks as well as the S&P energy sector, which slumped 2.91 percent.

Oil at 12-year lows is stoking fears on Wall Street of deeper losses for energy companies and the potential that some may fail to pay their debts. That has created carnage in oil stocks, helping push the S&P 500 down 8 percent since the start of the year.

US stocks had opened higher after a report showed China's growth in 2015 was the slowest in 25 years but in line with expectations. The report raised hopes that Beijing would cushion the slowdown with more stimulus policies, but gains in U.S. markets were short-lived and the S&P moved lower in afternoon trade.

"You have a tremendous amount of fear and uncertainty in the markets and we'll need to see more than one good economic data point to overcome that," said David Carter, chief investment officer at Lenox Wealth Advisors in New York.

In a sign that there more misery may lay ahead, Tuesday's failed rally follows about a dozen similar short-lived gains so far this year. Failed rallies often characterize the early stages of a bear market as some investors buy on dips, but not enough of them to sustain a move up in share prices.

At 2:55 pm, the Dow Jones industrial average was down 0.29 percent at 15,941.38 point and the S&P 500 had lost 0.61 percent to 1,868.95. The Nasdaq Composite dropped 1.03 percent to 4,442.15, hurt most by a 1.3 percent decline in Apple.

European equities bounced back from 13-month lows on Tuesday, with mining and energy stocks leading the market higher as prices of major industrial metals and crude oil surged following the release of Chinese growth data.

The pan-European FTSEurofirst 300 index was up 2.1 percent by 1123 GMT after slipping to a 13-month low in the previous session.

Japanese stocks rose for the first time in four days as investors bought recently battered stocks, and as China's fourth-quarter growth data met expectations.

The Nikkei share average rose 0.6 percent to 17,048.37 points, snapping a three-day losing streak.

China's economy grew 6.8 percent in the fourth quarter from a year earlier, Tuesday's gross domestic product (GDP) data showed, the slowest growth since 2009. But there were no hints of a hard landing as some investors have feared.

The broader Topix added 0.2 percent to 1,390.41 and the JPX-Nikkei Index 400 advanced 0.2 percent to 12,524.07.

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