Mon | Sep 25, 2017

The market had its worst week since 2011

Published:Friday | January 8, 2016 | 1:51 PM

A wave of late selling pummeled United States stocks Friday and pushed the market to its worst week in four years.

The dismal start to the new year comes as investors worry that China's huge economy is slowing down. That has helped send the price of oil plunging to its lowest level since 2004, the latest blow to US energy companies.

Industrial and technology companies such as Boeing and Apple that do a lot of business in China have also fallen sharply this week. Mining companies such as Freeport-McMoRan plunged as copper prices have fallen. China is a major importer of copper.

Stocks started the day higher, driven in part by news of an encouraging burst in hiring last month by US employers. China's stock market also rose 2 per cent overnight, recovering somewhat after steep drops earlier in the week triggered trading halts.

Indexes wavered between small gains and losses for most of the day, but took a decisive turn lower in the last hour of trading. That made this the worst week since September 2011, when the market was roiled by the fight over the U.S. debt ceiling and Standard & Poor's move to cut the credit rating of the U.S. government.

The Dow Jones industrial average dropped 167.65 points, or 1 per cent, to 16,346.45. The Standard & Poor's 500 index fell 21.06 points, or 1.1 per cent, to 1,922.03. The Nasdaq composite index shed 45.80 points, or 1 per cent, to 4,643.63.

The Dow and S&P 500 are each down about 6 per cent for the week. The Nasdaq composite fell even more, 7.3 per cent. That index is heavily weighted with technology and biotech companies, both of which were high-fliers last year.

European stocks also rose early in the day, but couldn't hang on. The FTSE 100 index of leading British shares declined 0.7 per cent while Germany's DAX lost 1.3 per cent. The CAC-40 in France slid 1.6 per cent.

The same pattern held in the US. In its monthly jobs report, released before the stock market opened, the Labor Department said US employers added 292,000 jobs in December, far more than economists had forecast.

That's the latest sign the US economy is still growing. On average employers added 284,000 jobs per month in the fourth quarter, the best rate in a year.

Michael Fredericks, portfolio manager for BlackRock Multi-Asset Income Fund, said the labour market is healthy and wages could improve this month. "These are unusually strong job creation numbers," he said.

Oil prices also lost ground. US crude fell 11 cents to close at US$33.16 a barrel in New York and Brent crude, a benchmark for international oils, declined 20 cents to US$33.55 a barrel in London.

In other energy trading, heating oil fell 1.4 cents to US$1.052 a gallon and natural gas rose 9 cents to US$2.472 per 1,000 feet.