Wall Street bled on Friday, with the S&P 500 sinking to its lowest since October 2014 as oil prices sank below $30 per barrel and fears grew about economic trouble in China.
Pain was dealt widely, with the day's trading volume unusually high and more than a fifth of S&P 500 stocks touching 52-week lows. The major S&P sectors all ended sharply lower. The Russell 2000 small-cap index dropped as much as 3.5 percent to its lowest since July 2013.
The energy sector dropped 2.87 percent as oil prices fell 6.5 percent, in part due to fears of slow economic growth in China, where major stock indexes also slumped overnight. The energy sector has lost nearly half its value after hitting record highs in late 2014.
"Initially when oil was down, the convenient line was 'Well, it's good for the other nine sectors'," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. "That tune has changed. Now, it's a contagion to the other nine sectors. It's a contagion to Main Street and Wall Street."
The technology sector was the day's biggest loser, sliding 3.15 percent as weak quarterly results from chipmaker Intel weighed heavily on chip stocks.
The S&P 500 has fallen about 12 percent from its high in May, pushing it into what is generally considered "correction territory."
China's major stock indexes shed over 3 percent, raising questions about Beijing's ability to halt a sell-off that has now reached 18 percent since the start of the year.
The Dow Jones industrial average dropped 2.39 percent to end at 15,988.08 and the S&P 500 fell 2.16 percent to 1,880.33. The Nasdaq Composite lost 2.74 percent to 4,488.42.
For the week, the Dow fell 2.2 percent, the S&P 500 lost 2.2 percent and the Nasdaq dropped 3.3 percent.
U.S. stock exchanges will be closed on Monday in observance of Martin Luther King Jr. Day, while China's equity markets will be open.
During Friday's session, the CBOE volatility index, Wall Street's fear gauge, jumped as much as 29.2 percent to 30.95, its highest level since September.
"Investors are scared to death, and the fact that it's happening at the beginning of the year has some historical significance," said Phil Orlando, chief equity market strategist at Federated Investors in New York.
U.S. economic data on Friday was not encouraging either, with an unexpected drop in retail sales and industrial output declining again in December, underscoring a worsening outlook for fourth-quarter economic growth.
Dow components Exxon and Chevron fell around 2 percent, while Caterpillar dropped 2.65 percent.
Intel tumbled 9.1 percent, its steepest drop in seven years, after the chipmaker's results and forecast raised concerns about its growth.
Citigroup fell 6.41 percent, while Wells Fargo dropped 3.59 percent after both reported largely in-line quarterly earnings.
Wynn Resorts was the among the few bright spots, surging 13.34 percent after reporting in-line quarterly revenue.
Declining issues outnumbered advancing ones on the NYSE by 2,591 to 529. On the Nasdaq, 2,377 issues fell and 502 rose.
The S&P 500 index showed no new 52-week highs and 135 new lows, while the Nasdaq recorded five new highs and 511 lows.
About 10.8 billion shares changed hands on U.S. exchanges, well above the 7.6 billion daily average for the past 20 trading days, according to Thomson Reuters data.
Reuters
Sat Jan 16 2016
A screen displays the Dow Jones Industrial Average after the closing bell on the floor of the New York Stock Exchange January 15, 2016. REUTERS/Brendan McDermid
Motorcycling - Marquez wins Australian MotoGP after intense battle with Martin
The 31-year-old, third in the championship standings, has now won the Australian MotoGP four times in the premier class.
Prabowo takes up Indonesian presidency, vows to tackle corruption, other issues
Indonesia's Prabowo Subianto on Sunday took over as president of the world's third-largest democracy, vowing to combat internal issues
Nepal's Sherpas deserve more, says teenager who scaled world's 14 tallest peaks
Sherpas are known for climbing skills that make them the backbone of mountain expeditions.
Inside the underground lab in China tasked with solving a physics mystery
China will soon collect neutrino data, aiming to unravel one of particle physics' biggest mysteries.
Millions in Cuba still without power as major outage persists
Millions of Cubans remain without electricity because of a prolonged outage at the main power plants on the island, Anadolu Agency reported.
Surge in Gaza violence increases famine risk, monitor says
About 1.84 million people across the besieged Palestinian enclave are living through high levels of acute food insecurity.
Israel pounds Beirut and Gaza after rockets hit Israel's north
A drone was launched at Prime Minister Benjamin Netanyahu's holiday home.
Elon Musk promises to award $1 mil each day to a signer of his petition
He awarded a $1 million check to an attendee of his event in Pennsylvania aimed at rallying supporters behind Donald Trump.
Former special forces commander Prabowo to take up Indonesian presidency
Indonesia's Prabowo Subianto will take over as president of the world's third-largest democracy after sweeping the country's election with policies like free meals for school children
Father of Malaysian Islamic banking, Abdul Halim Ismail passes away
His dedication and pioneering spirit played an important role in shaping the journey of Bank Islam as well as leaving a lasting impact on the development of Malaysia's Islamic finance industry.
Zayn Malik postpones US tour dates after One Direction bandmate Liam Payne's death
Payne, 31, died on Wednesday after falling from a third-floor hotel room balcony in Buenos Aires, shocking fans of the boy band.
Why voters in a handful of swing states will decide the US presidential election
The contest will almost certainly be decided by just tens of thousands of voters a tiny fraction of the populace in a handful of states.
INSIGHT - Sudan's war risks 'lost generation' of children
A devastating crisis is unfolding in Sudan, where the most vulnerable members of society children are bearing the brunt of the violence.
Who is Prabowo Subianto, incoming president of Indonesia?
A wealthy ex-general with ties to Indonesia's popular outgoing president and its dictatorial past, looks set to be its next leader.
Trump says he would impose tariffs on China if China went into Taiwan
Republican presidential candidate Donald Trump said he would impose additional tariffs on China if China were to "go into Taiwan,"
Iran's supreme leader says Hamas leader's death will not halt 'Axis of Resistance'
The "Axis of Resistance", built up with years of Iranian support, includes Hamas, the Lebanese Hezbollah group, the Houthi movement in Yemen, and various Shi'ite groups in Iraq and Syria.
Putin says Russia willing to seek compromises between Iran and Israel
Russia is ready to help seek compromises between arch-foes Israel and Iran, President Vladimir Putin said on Friday, saying these would be difficult but possible.
What proposals will Russia push at the BRICS summit?
The proposal is also to establish a BRICS reinsurance company to allow uninterrupted shipment of goods and key commodities between members.
Indonesia's free meals plan in the spotlight as Prabowo readies for office
Prabowo calls the programme one of the main drivers of economic growth, eventually set to add an estimated 2.5 million jobs.
Astro AWANI's revamped English news website, AWANI International, launches on Oct 21
Astro AWANI's revamped English platform delivers in-depth global news and expert analysis to keep you informed on key developments.