Stocks - Dow Dives as Trade Jitters, Energy Slump Trigger Bloodbath

Investing.com - The Dow moved off session lows Thursday, but continued to nurse heavy losses, led by financials and energy, as plunging oil prices and trade-war jitters prompted a wave selling across Wall Street.

The Dow Jones Industrial Average fell 2%, but remained above its session lows of 24,242 so far. The S&P 500 fell 2%, while the Nasdaq Composite fell 1%.

Energy led the selling on Wall Street as oil prices tumbled after OPEC members delayed a decision on output until after it meets with other non-OPEC producers on Friday, denting already fragile expectations for an agreement to reduce output aggressively.

U.S. oil prices, however, did find some reprieve, helping energy move off lows as the Energy Information Administration's weekly petroleum data showed domestic crude supplies fell sharply. But U.S. production, which remained at record highs, staved off a more meaningful recovery in oil prices.

Exxon Mobil (NYSE:XOM) fell 3%, Chesapeake Energy (NYSE:CHK) fell 8.43% and Marathon Oil (NYSE:MRO) fell 6%.

The arrest of Huawei Chief Financial Officer Meng Wanzhou in Canada, meanwhile, reportedly at the behest of U.S. officials, raised fears that the fragile trade war ceasefire between the United States and China may collapse, sending trade-sensitive sectors tumbling.

Industrials, home to trade bellwethers like Boeing (NYSE:BA) and Caterpillar (NYSE:CAT), dropped more than 2%, keeping the broader market on the back foot.

Elsewhere bank stocks, which have come under pressure from an ongoing slump in U.S. government bond yields, were thrown into further turmoil after Citigroup (NYSE:C) hinted at a profit warning on Wednesday.

Citigroup CFO John Gerspach said Wednesday the bank expects market revenue in the current quarter to be slightly lower than last year, sending the stock more than 5% lower.

Weakness in shares of Apple (NASDAQ:AAPL), meanwhile, resumed the wreck in tech after smartphone camera lens supplier Largan (TW:3008) reported a 29% slump in its sales for November from a year earlier, pointing to weakness in smartphone demand.

Among other FANG stocks, Facebook (NASDAQ:FB) fell 1% after Stifel downgraded company to hold from buy on worries that potential political and regulatory blowback may lead to restrictions on how the social media giant operates over time.

In political news, the U..S. Congress passed a measure to keep the government funded for two more weeks, averting Friday’s shutdown deadline, allowing lawmakers more time to reach a consensus on spending and Trump's demand for $5 billion to fund his proposed border wall.

-- Reuters contributed to this report.

Related Articles

S&P analyst must face insider trading charges over merger of paint makers

Boeing CEO says hopeful U.S.-China on course to resolve trade dispute

Exclusive: U.S. probe of China's Huawei includes bank fraud accusations: sources