US stocks down 2% as global rout accelerates
A screen above the trading floor of the New York Stock Exchange shows the closing number for the Dow Jones industrial average, Wednesday, Jan. 20, 2016. U.S. stocks recovered much of an early plunge, but the price of oil suffered its worst one-day drop since September. AP Photo
NEW YORK, United States—Losses in Wall Street stocks accelerated Monday morning, with the Dow and S&P 500 dropping more than two percent as global equities retreated after another drop in oil prices.
Near 1550 GMT, US stocks had cut losses a bit, with the Dow Jones Industrial Average down 285.68 points (1.76 percent) at 15,919.29.
The broad-based S&P 500 fell 33.11 (1.76 percent) to 1,846.94, while the tech-rich Nasdaq Composite Index shed 93.38 (2.14 percent) to 4,269.76.
The losses in New York came as European bourses suffered even deeper declines, with London, Paris and Frankfurt all down more than two percent.
“I don’t think there’s any new information investors are digesting, it’s still part of this negative momentum trade,” said Jack Ablin, chief investment officer at BMO Private Bank.
Article continues after this advertisementBanking shares were among the worst performers, with Bank of America and Morgan Stanley down more than five percent and Goldman Sachs losing 4.8 percent.
Article continues after this advertisementPetroleum-linked shares were another hard-hit sector. Anadarko Petroleum lost 4.3 percent, Marathon Oil 7.7 percent and Weatherford International 4.3 percent.
Technology stocks remained weak. Amazon, Facebook and Priceline all lost more than three percent.
Ablin said investors are turning away from the Federal Reserve’s interest rate policy and concentrating on corporate performance.
“The Fed has decided not to be the market’s babysitter anymore, so investors are having to adjust a monetary-centric market to one that focuses on fundamentals like earnings and revenues.”
Based on that, there is still a need for a “sizeable” valuation adjustment, Ablin added.
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