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Global stocks in retreat as oil prices slip once again Global stocks in retreat as oil prices slip once again
(35 minutes later)
NEW YORK — U.S. stocks stumbled Monday as investors continue to worry about the health of the global economy amid falling oil prices.NEW YORK — U.S. stocks stumbled Monday as investors continue to worry about the health of the global economy amid falling oil prices.
The Dow Jones industrial average and the Standard & Poor’s 500-stock index were down more than 2 percent with losses accelerating throughout the afternoon. The tech-heavy Nasdaq was seeing deeper losses, more than 3 percent. Investors scrambling for safety bought up government bonds, sending those yields down. (When there is high demand for bonds, their prices increase and yields, or interest rates, fall.) The Dow Jones industrial average and the Standard & Poor’s 500-stock index fell about 1 percent, recovering from deeper losses earlier in the day. The tech-heavy Nasdaq tumbled further, about 1.8 percent. Investors scrambling for safety bought up government bonds, sending those yields down. (When there is high demand for bonds, their prices increase and yields, or interest rates, fall.)
This continues what has already been a tough year for investors. The Dow, a barometer of 30 blue-chip stocks, and S&P, a broader look at the market, are down 8.5 percent and 9.6 percent so far this year. The Nasdaq is taking even heavier losses, tumbling nearly 15 percent over the last month. This continues what has already been a tough year for investors. The Dow, a barometer of 30 blue-chip stocks, and S&P, a broader look at the market, are down 8 percent and 9 percent respectively so far this year. The Nasdaq is taking even heavier losses, tumbling more than 14 percent over the last month.
Tech investors are cashing in their profits, sending stocks such as Amazon, which had among the biggest market jumps last year, lower, analysts say. Amazon’s stock was down about 5 percent Monday, but has lost almost 30 percent of its value so far this year. (Amazon chief executive Jeffrey Bezos owns The Washington Post.) Tech investors are cashing in their profits, sending stocks such as Amazon, which had among the biggest market jumps last year, lower, analysts say. Amazon’s stock was down about 2.8 percent Monday, but has lost 28 percent of its value so far this year. (Amazon chief executive Jeffrey Bezos owns The Washington Post.)
Yelp, the review site, tumbled 12 percent, while Alphabet, the parent company of Google, down almost 3 percent. The Nasdaq is now within striking distance of a “bear” market, a sell-off of at least 20 percent. Tripping that wire could spread fears that the market volatility that has marked the year could worsen, analysts have said.
The Nasdaq is now within striking distance of a “bear” market, a sell-off of at least 20 percent. Tripping that wire could spread fears that the market volatility that has marked the year so far could be poised worsen, analysts have said.
Investors appear spooked by several factors, including that falling oil prices may reflect a weakness in the global economy that the United States won’t be able to avoid. The price of WTI crude fell to about $29 a barrel on Monday and is down more than 50 percent over the past year.Investors appear spooked by several factors, including that falling oil prices may reflect a weakness in the global economy that the United States won’t be able to avoid. The price of WTI crude fell to about $29 a barrel on Monday and is down more than 50 percent over the past year.
Consumers have been pocketing the savings from low fuel prices rather than spending it, and banks that bet big on oil companies are starting to feel the pinch. A slowdown in China’s economy could also curb fuel demand over the next few years, analysts have said.Consumers have been pocketing the savings from low fuel prices rather than spending it, and banks that bet big on oil companies are starting to feel the pinch. A slowdown in China’s economy could also curb fuel demand over the next few years, analysts have said.
Investors have also been skittish about the pace at which the Federal Reserve will raise key interest rates. If the Fed raises rates too quickly, it could hurt the pace of the country’s already weak economic recovery; if they do it too slowly, investors will fear that the economy is weaker than widely believed, analysts said. Investors may receive some clarity on that issue this week when Federal Reserve Chair Janet Yellen offers her semiannual testimony before Congress.Investors have also been skittish about the pace at which the Federal Reserve will raise key interest rates. If the Fed raises rates too quickly, it could hurt the pace of the country’s already weak economic recovery; if they do it too slowly, investors will fear that the economy is weaker than widely believed, analysts said. Investors may receive some clarity on that issue this week when Federal Reserve Chair Janet Yellen offers her semiannual testimony before Congress.
The energy sector was hardest hit Monday, but banking stocks were also down significantly. Bank of America and Citigroup were down 5 percent and 4 percent, respectively. The energy sector was hardest hit Monday, but banking stocks were also down significantly. Bank of America and Citigroup were down both down about 5 percent.
“We don’t really know how exposed banks are to potentially bad loans in the energy sector,” said Phil Orlando, chief equity market strategist for Federated Investors. So investors are taking out their fears on the entire financial sector, he said.“We don’t really know how exposed banks are to potentially bad loans in the energy sector,” said Phil Orlando, chief equity market strategist for Federated Investors. So investors are taking out their fears on the entire financial sector, he said.