Dow falls 400, S&P at lowest level since late 2014 as oil breaks $27

finance.yahoo.com

U.S. stocks traded more than 2 percent lower Wednesday as further decline in oil prices pressured global equities.

The Dow Jones industrial average fell more than 400 points in morning trade with IBM (IBM) contributing the most to declines. The Nasdaq composite underperformed, trading more than 2.5 percent lower.

The S&P 500 fell more than 2.5 percent to trade around 1,830, near its lowest since late 2014. 

More than 1,000 NYSE-listed stocks hit 52-week lows in the first 20 minutes of trading, the most since Aug. 24, Reuters reported.

"Oil is certainly weighing on investors' psyche," said Eric Wiegand, senior portfolio manager at U.S. Bank Private Client Reserve. "It's the absence of growth. The economic data we've seen out of the U.S. has been mixed. It really comes to where is growth likely to take hold."

"Our premise is markets will follow the direction of earnings to the extent that we see some earnings growth and that may come from reduced volatility in currencies," he said.

Oil continued to trade near lows not seen in more than a decade. U.S. oil for February delivery, which expires after the close Wednesday, traded more than 3 percent lower near $27.50 a barrel as of 9:51 a.m. ET. The March contract traded more than 2.5 percent lower near $28.70 a barrel.

"Obviously we're in the throes of an environment where sentiment is not positive about risk assets, so it takes very little to put pressure ... Pressure coming from falling oil prices continues to serve as a cues for equities to follow suit," said Mark Luschini, chief investment strategist at Janney Montgomery Scott.

European stocks traded more than 2 percent lower. Asian stocks closed deep in the red, with the Nikkei 225 down 3.7 percent to end more than 20 percent below its 52-week intraday high, in bear market territory.

Traders have been watching the S&P 500's August low of 1,867. The index broke below that level in intraday trade Tuesday and Friday, but closed above. U.S. stock markets were closed Monday for a holiday.

"The S&P futures are decisively below their August low this morning in a bearish development," BTIG Chief Technical Strategist Katie Stockton said in a Wednesday morning note. "The inability of the market to sustain yesterday morning's strength is a message — downside momentum is strong enough to maintain oversold conditions."

"This is characteristic of a downtrend, as opposed to a correction," she said. 

"There are times at which the contrarian extremes in our market internal measures are no longer bullish, even from a short-term perspective, and there currently appears to be risk of that." 

In economic news, the December U.S. CPI showed a 0.1 percent decline. Ex-food and energy, the index rose 0.1 percent after rising 0.2 percent for three straight months, according to Reuters. In the 12 months through December, this so-called core CPI rose 2.1 percent, the largest gain since July 2012, after climbing 2.0 percent in November.

Building Permits fell 3.9 percent in December. Housing Starts fell 2.5 percent but the seasonally adjusted annual pace remained above a 1 million.

Dow futures traded about 250 points lower after the data and a slight recovery in oil. Earlier, Dow futures were off more than 300 points.

"Today's data on CPI and housing starts ... were soft in both cases, continuing to support a case that the Fed will continue to lower its dot plot," Luschini said.

Treasury yields held lower, with the 2-year yield near 0.83 percent and the 10-year yield at 1.98 percent, as of 9:47 a.m. ET.

The U.S. dollar index held a touch higher against major world currencies, with the euro near $1.09 and the yen at 116.64 yen against the greenback. 

"CPI fell even though the core rate remained (relatively) unchanged," said Peter Cardillo, chief market economist at First Standard Financial. "I think if this continues the Fed may have to change course."

"There's no question the markets are oversold. You look at the earnings, they're basically coming in on target," he said. "What the market is missing here is a real climactic sell-off that could bring us to capitulation. I'm not sure it happens today, but we're getting closer to it."

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【on.cc東網專訊】 油價跌勢加劇，紐約期油跌穿28美元關口，低見每桶27.2美元，現報27.44美元，大跌1.02美元或4%。在能源股拖累下，美股跌勢加劇，道指現報 15,593點，挫422點或2.64%，令MSCI全球指數由高位累瀉20%，即技術上陷入熊市。