Wall Street drops to 3-month low; China, energy weigh | Reuters - Firstpost
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Wall Street drops to 3-month low; China, energy weigh | Reuters

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U.S. stocks closed at their lowest level since early October on Wednesday, weighed down by fresh concerns over China and slower global growth and as energy shares tumbled with oil prices.

Shares of oil majors Exxon (XOM.N) and Chevron (CVX.N) fell and the energy index .SPNY dropped 3.6 percent as oil prices plunged below $35 a barrel.

Shares of Apple (AAPL.O) briefly dipped below $100 for the first time since Aug. 24 and the stock was the biggest drag on both the S&P 500 and Nasdaq. The stock ended down 2 percent at $100.70.

The losses add to the sour tone for the start of the year. Weak data from China triggered declines in global markets on Monday, with the Dow recording its worst first day of the year since 2008.

The People's Bank of China on Wednesday stepped in again to weaken the yuan, raising fears that the country's economy was even weaker than had been expected.

"The big influence continues to be concerns about what's going on in China," said Stephen Massocca, chief investment officer at Wedbush Equity Management LLC in San Francisco.

"I think there's this theory going around that the global economy is going to slow greatly, driven by a large slowdown in China."

Adding to investors' nervousness was North Korea's announcement that it had successfully tested a hydrogen bomb.

The Dow Jones industrial average .DJI was down 252.15 points, or 1.47 percent, to 16,906.51, the S&P 500 .SPX lost 26.45 points, or 1.31 percent, to 1,990.26 and the Nasdaq Composite .IXIC dropped 55.67 points, or 1.14 percent, to 4,835.77.

Stocks added to losses late in the session as minutes from the last Federal Reserve meeting showed policymakers decided to raise interest rates last month after almost all of them gained confidence inflation was poised to rise, but some voiced worries inflation could get stuck at dangerously low levels.

The CBOE Volatility Index .VIX, the market's favoured gauge of Wall Street anxiety, was up 6.5 percent to 20.59, well off the high of 23.36 touched on Monday.

"We haven't really seen a major pick-up in volume to the downside. That shows that we are not seeing a lot of people panicking and trying to get out," said Scott Fullman, chief strategist at Revere Securities Corp.

Data earlier in the day showed that private employers added 257,000 jobs, far ahead of the 192,000 increase expected by economists polled by Reuters. The data comes ahead of a more comprehensive non-farm payroll report on Friday.

Chipotle (CMG.N) fell 5 percent to $426.67. The company was served with a grand jury subpoena in relation to a criminal investigation into a norovirus contamination at one of its restaurants.

About 8.2 billion shares changed hands on U.S. exchanges, above the 7.1 billion daily average for the past 20 trading days, according to Thomson Reuters data.

NYSE declining issues outnumbered advancing ones 2,314 to 779, for a 2.97-to-1 ratio; on the Nasdaq, 2,019 issues fell and 812 advanced, for a 2.49-to-1 ratio favouring decliners.

The S&P 500 posted two new 52-week highs and 46 lows; the Nasdaq recorded 29 new highs and 132 lows.

(Additional reporting by Tanya Agrawal and Saqib Ahmed; Editing by Saumyadeb Chakrabarty and Nick Zieminski)

This story has not been edited by Firstpost staff and is generated by auto-feed.

First Published On : Jan 7, 2016 04:30 IST

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