NEW YORK (AP) — A slump in oil prices sparked a global sell-off in financial markets on Friday with losses spreading from Asia to Europe to the U.S., where stocks fell sharply to cap their worst week since the summer.
NEW YORK (AP) — A slump in oil prices sparked a global sell-off in financial markets on Friday with losses spreading from Asia to Europe to the U.S., where stocks fell sharply to cap their worst week since the summer.
The selling was broad, with all 10 sectors of the Standard and Poor’s 500 index ending down. Fearful investors put their money in government bonds, especially U.S. Treasurys. Another measure of anxiety, the so-called Vix index, jumped. It is now up 70 percent in just five days.
Investors worry the sharp fall in the price of oil and other commodities is a sign of weakness in the global economy, especially China, and that will cut into profits at big energy producers and suppliers of raw materials as well as other companies.
“We’re stockpiling commodities and demand is not picking up,” said Tim Courtney, chief investment officer of Exencial Wealth Advisors. “It’s kind of a depressing market.”
Energy shares, already decimated this year, fell 3.4 percent on Friday. Southwestern Energy plunged 14 percent. Freeport McMoRan, a mining giant, dropped 6 percent.
The trouble began with a report from the International Energy Agency that said the oversupply in oil would persist until late next year even as demand continues to weaken. Benchmark U.S. crude plunged $1.14, or 3 percent, to close at $35.62 a barrel in New York.
It has been falling for 1 1/2 years and is now at its lowest level since early 2009.
By the end of the day, the S&P 500 index had lost 39.86 points, or 1.9 percent, to 2,012.37. It was down 3.8 percent for the week, its worst showing since August.
The Dow Jones industrial average lost 309.54 points, or 1.8 percent, to 17,265.21. The Nasdaq composite declined 111.71 points, or 2.2 percent, to 4,933.47.
In Europe, Germany’s DAX lost 2.4 percent, Britain’s FTSE 100 dropped 2.2 percent and France’s CAC 40 shed 1.8 percent.