The slump in oil prices continued to drive shares lower on global markets Jan. 20. (Reuters)
Queasy investors sent global markets plunging again Wednesday, stomping out recent meager gains and spotlighting fresh worries over cratering oil prices and signs of slowing international growth.
The Dow Jones industrial average lost more than 500 points, dropping 3 percent to 15,500 by 12:30 p.m. EST. The broader Standard & Poor's 500 index crumbled 3 percent, and the tech-heavy Nasdaq Composite fell 3.2 percent.
U.S. oil prices plunged more than 6 percent Wednesday to about $ 26 a barrel, their lowest level since 2003, after having plummeted nearly 30 percent since the year began. Investors say weakening global demand for oil, so vital to construction and manufacturing, could point to a broader underlying danger of slowing global growth.
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The worldwide rout extended a devastating trading streak that has marked the worst start to a year in market history, with the three major U.S. indices falling more than 10 percent in the last three weeks. American companies this year have already lost more than $ 2 trillion in market wealth.
The panicked sell-off touched every corner of American industry, most notably energy, raw materials, finance and retail.
Even companies posting encouraging results have been bruised. Streaming giant Netflix, which told Wall Street on Tuesday that its earnings and international subscriber base had grown more than expected, nevertheless saw its shares fall Wednesday more than 6 percent.
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Other technology giants were similarly hit. Facebook stock fell more than 5 percent, and Apple shares fell about 3 percent to their lowest level since the summer of 2014.
An increasingly sluggish China has touched off fears of a hard landing for the world's second-largest economy, which could ripple outward and harm the many companies who rely on its exports and spending for business.
The International Monetary Fund on Tuesday trimmed its projections for global growth for the third time in less than a year, pointing to a recent Beijing report that showed China's economy grew in 2015 at its slowest rate in more than two decades.
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The International Energy Agency, a global oil adviser, said Tuesday that crude oil prices would continue to plunge this year if suppliers in countries such as Iran keep pumping, creating a glut that could force the oil market to "drown in oversupply."
Slumping energy prices have helped lower the cost of living in the U.S., with December posting the smallest yearly increase in the Consumer Price Index in seven years, the Labor Department said Wednesday.
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Tuesday's trading began hopeful but soured by the U.S. closing bell, leaving indexes like the Dow with only slight gains.
Investors flocked to the relative safe havens of gold and government bonds, with yields on 10-year U.S. Treasury notes falling just below 2 percent Wednesday. The yields fall as prices rise.
The sell-off has cast a dark cloud over the U.S. economy, particularly after the Federal Reserve acted late last year to raise short-term interest rates for the first time in nearly a decade.
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The labor market has strengthened, adding an average of 284,000 jobs over the last three months, but industrial production and consumer spending both fell last month.
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Global markets Wednesday took a beating. Europe's Stoxx 600 index tumbled more than 3 percent, while shares in Hong Kong dove sharply to three-year lows.
Japan's Nikkei Stock Average slid more than 3 percent and entered what analysts call a bear market, having collapsed 20 percent from recent highs.
Drew Harwell is a national business reporter at The Washington Post.
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