How many times this past year has the Dow dropped more than four or five hundred points in a single day?  How many times in the past month has the Dow dropped more than 300 points in a single day!  How many times in the past year has the price of crude fallen five percent or more?  How many times has China looked like it's on the brink?  Well, I can tell you there's no investor out there with enough fingers to count them all.  But today is the day that the whole world decided to scream -- Armageddon!

Yes, it was a very bad day.  With China shedding over three percent overnight and oil futures slumping yet again, less than 3 minutes out the gate the Dow plummeted a good 400 points, which was only matched by a further decline approaching 600 points by midday before rising again to close 391 down, a near 40% recovery.  Yes, a lot went wrong today.  Crude lost 6.5%, the S&P lost 2 more percentage points off its May high again reaching "correction" territory, China is now down 18% just since January 1st, the volatility index rose almost one-third in one day reaching a level not seen since the big August sell off, and even the latest economic data was looking less than great with an unexpected decline in both factory output and retail sales for the holidays.  All eyes thus will be tight on China on Monday while Wall Street vacations for Martin Luther King.  Tuesday there's likely to be another big reaction.  Will there be another bounce or is this the beginning of a genuine bear market?  Most of the seers say no to the latter.  At 10.8 billion shares, volume was a little higher than the 10 billion shares that were traded in yesterday's huge rally that sent the Dow up 227 points.


Markets | Fri Jan 15, 2016 5:46pm EST

Wall St. hemorrhages as oil tumbles and China fears deepen

BY NOEL RANDEWICH

DJ:  15,988.08  -390.97      NAS: 4,488.42  -126.59       S&P:  1,880.33  -41.51

(Reuters)  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.