US stocks dropped with the Dow Jones industrial Average capping the largest weekly decline in three years, and oil continued to drop while Chinese industrial data increased concern over the global economic slowdown.
Materials stock dropped the most in the S&P 500 index, losing 2.9% as a group while the energy shares suffered a 2.2% drop. International Business machines Corp, Exxon Mobil Corp and DuPont Co. dropped around 2.9% leading declines in the 30 Dow stocks.
According to Bloomberg, the S&P 500 dropped 1.6% to 2,002.33 extending losses in the last hour to cap the weekly drop of 3.5%. The Dow dropped 1.8% or 315.51 points to 17,280.83. The Dow dropped 3.8% for the week, the largest decline since November 2011.
Randy Warren, managing more than $100 million at Warren Financial Service and Associates Inc. said, “Clearly the oil situation is driving things. At first it was just oversupply of oil. But now it’s that, plus fear of a world economy that’s growing too slow. Those fears are definitely outweighing the positive signs we’re seeing domestically.”
USA Today quoted Howard Silverblatt, senior index analyst for S&P Indices as having said, “It was a bad week, but similar to other upswings this year, the decline after several highs was moderate and controlled. The question, however, remained the same as it was before- is that it?”
Falling prices of oil outweighed on the stock market. Oil dropped after the International Energy Agency said global demand for oil in 2015 will grow less than the previous forecast.
US benchmark oil dropped $2.14 or 3.6% to $57.81 per barrel. Oil dropped 12.6% in the week and the energy stocks in the S&P index dropped 1.4% taking the loss of the year to 15.9%.
Global market strategist for JP Morgan Finds, James Liu said, “The move, especially this week, has been entirely related to oil. In the fourth quarter you’re going to see a lot of pain from the energy sector.”
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