Stocks Continue Sinking Thanks To Oil Slump

oil down

Stocks in the U.S. closed down sharply lower over the past few days following a selloff in Chinese stocks, disappointing data out of the U.S., and oil tumbling to below $30 a barrel. Recent market activity indicates that investors are growing increasingly concerned about slowing global growth.

Stocks ended the day over 2% lower, and the Dow Jones industrial average and S&P 500 posted their worst two-week start to a new year in history.

Despite seeing losses, the S&P 500 still remained above its August low, which was 1,867. For a brief moment, the index fell 3.5%, falling below the August low and reaching its lowest point since October of 2014.

The anticipation of China’s GDP data on Tuesday and options expiring on Friday also contributed to volatility.

The Dow Jones Industrial average closed down the day 390 points lower. At one point, the index dropped 537 points, but recovered slightly later in the day. The index still closed below 16,000, a psychologically key level, the first time since August. Goldman Sachs (GS) led the decline, dragging down the index.

Meanwhile, crude oil settled at $29.42 a barrel, down 5.71% ($1.78). This is the first time in 12 years that oil has fallen below $30 a barrel. WTI took an 11.2% loss for the week, its worst performance in over a year.

An index that gauges fear in the market topped 30 for a brief moment in time for the first time since September.

The financial sector closed down 3.4%, dragging down all S&P 500 sectors. Energy and information technology also contributed greatly to the decline.

Dow transports were down 1.6% after falling over 3% earlier in the day.

Concerns about increasing oversupply and a major sell-off in China drove oil prices down. The lifting of international sanctions on Iran is causing increased fears that Iranian oil exports will worsen the supply glut. According to a report from Baker Hughes, the weekly rig count only declined by 1.

Brent crude dropped to $20.94 a barrel, falling 6.28% – its lowest level in over a decade. Brent had lost 13.7% for the week, marking its worst weekly decline in nearly eight years.

The 10-year treasury yield fell below 2% after the release of a report that showed retail sales dropped 0.1% in the month of December. At the time of closing, the 10-year yield hovered around 2.03%, and the 2-year yield was about 0.84%.

Industrial production fell 0.4% in December, and the Producer Price Index took a 0.2% hit after increasing 0.3% in November.

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