Stock market slides again in worst 2-week start to a year

Never before has Wall Street gotten off to a worse start to a year.

The stock market capped the first two weeks of 2016 with a steep slide Friday that sent the Dow Jones industrial average down nearly 400 points.

All three major stock indexes — the Dow, the Nasdaq composite and the Standard & Poor’s 500 — are now in what’s known as a correction, or a drop of 10 percent or more from their recent peaks.

The market has been on a stomach-churning ride since the start of the year, wrenched up — but mostly down — because of alarm over a slowdown in China and the plunging price of oil to its lowest level in 12 years. Investors are already seeing damage to U.S. corporate profits, particularly at energy companies.

The Dow slid 390.97 points, or 2.4 percent, to 15,988.08. The average had been down more than 500 points early in the afternoon. The S&P 500 ended down 41.51 points, or 2.2 percent, at 1,880.33. The Nasdaq dropped 126.59 points, or 2.7 percent, to 4,488.42.

The Dow and S&P 500 have now fallen about 8 percent this year, while the Nasdaq is off about 10 percent.

The world’s wealthiest people are really feeling the pain.

The 400 richest people have lost $305 billion from their combined net worth this month, Bloomberg reported Friday. The billionaires lost more than $115 billion this week, with 76 taking hits of at least $1 billion in January, according to the Bloomberg Billionaires Index.

Amazon.com founder Jeff Bezos led decliners on the Bloomberg index, losing $8.9 billion since Jan. 1 and $1.9 billion Friday when the Internet retailer declined 3.85 percent. Bill Gates, the world’s richest person, has lost $6.8 billion of his net worth this year, and Wang Jianlin, China’s richest person, is down $6.4 billion.

“Oil is the root cause of today,” Dan Farley, regional investment strategist at the Private Client Reserve at U.S. Bank, told the Associated Press. “People are uncertain, and when they’re uncertain they’re scared.”

Crude oil has dropped below $30 a barrel from a high of over $100 during the summer of 2014, eviscerating energy company profits. On Friday, Williams Cos. led a slide among oil, gas and mining companies, falling $2.19, or 12 percent, to $16.10.

Investors also got some discouraging economic news on Friday: The Federal Reserve said U.S. industrial production, which includes manufacturing, mining and utilities, dropped in December for the third month in a row. And another government report indicated U.S. retail sales dipped last month.

Many investors had welcomed the new year with fairly high hopes. They expected oil prices would stabilize. After a market correction in August, few forecast it would happen again so soon. And the Federal Reserve’s move in December to raise interest rates for the first time in nearly 10 years signaled to many that the U.S. economy was healthy.

“The hope was global growth would stabilize, and early in 2016 here, that has been a disappointment, too,” said David Chalupnik, head of equities at Nuveen Asset Management.

Despite the rough start to the year, Wall Street watchers are not ready to say the bull market is over.

“We don’t believe we’re going into a bear market,” Chalupnik said. “The reason for that is the U.S. economy is sound.”

Intel dropped 9.1 percent after the chip maker posted its fourth-quarter results, noting its personal computer business continues to slump. The stock was the biggest decliner in the Dow. It fell $2.98 to $29.76.

Benchmark U.S. crude fell $1.78, or 5.7 percent, to $29.42 a barrel in New York. Brent crude, a benchmark for international oils, fell $1.94, or 6.3 percent, to $28.94 a barrel in London.

Stocks opened higher in Europe but quickly fell. Germany’s DAX lost 2.5 percent, while France’s CAC 40 dropped 2.4 percent. Britain’s FTSE 100 fell 1.9 percent.

In China, the Shanghai Composite Index slid 3.6 percent to its lowest close in 13 months. China’s official Xinhua News Agency reported that new bank loans during the last month fell from a year earlier, another sign that the country’s economic growth is slowing from the torrid pace of the past few years.

Hong Kong’s Hang Seng dropped 1.5 percent. Japan’s Nikkei 225 lost 0.5 percent and South Korea’s Kospi 1.1 percent.

In other energy trading, wholesale gasoline fell 5 cents to close at $1.02 a gallon, heating oil fell 5 cents to close at 93 cents a gallon, and natural gas fell 4 cents to close at $2.10 per one thousand cubic feet.

Precious and industrial metals futures closed mixed. Gold rose $17.10 to $1,090.70 an ounce, silver gained 15 cents to $13.90 an ounce and copper fell 3 cents to $1.94 a pound.

Bond prices rose. The yield on the 10-year Treasury note fell to 2.03 percent from 2.09 percent late Thursday. The euro rose to $1.0911 from $1.0862, while the dollar fell to 117.05 yen.

This story was originally published January 15, 2016 at 6:54 PM with the headline "Stock market slides again in worst 2-week start to a year."