Tech Giants Hit Hard; Dow Drops More Than 390 Points
SAN JOSE (CBS SF) – The Dow Jones tumbled 537 points at one point Friday before rebounding to end the day down more 390 points as the financial markets suffered through another difficult week.
The Dow ended the session at 15,987 -- a 2.39 percent drop.
Intel led the losers, dropping more than 9 percent of its value after a poor outlook for early 2016.
The drop came after a day the shares of many tech companies enjoyed their best trading session of the year. Apple gained 2.19 percent in value to trade just below $100 a share. Yahoo and Facebook shared enjoyed nearly 3 percent gains and Google and Twitter 2 percent.
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All those gains were wiped out in early trading Friday as they fell victim to the wide-scale sell-off.
Apple fell 2.4 percent in value with Google down nearly 3 percent, Yahoo nearly 4 percent and Facebook 3.46 percent. The rough ride continued for Twitter which fell 5.58 percent to $17.94 a share -- a steep down from the social media giant's 52-week high of $53.49 a share.
In other market news, Wal-Mart announced it would close 269 stores worldwide. Two of the stores were in the Bay Area -- the Wal-Mart on Monterey Highway in San Jose and the Wal-Mart on Edgewater Drive in Oakland.
Meanwhile, global markets fell after China's Shanghai stock index sank to its lowest level in more than one year amid renewed concerns about the world's second-largest economy. The price of oil fell below $30 per barrel.
THE QUOTE: "Oil is the root cause of today," said Dan Farley, regional investment strategist at the Private Client Reserve at U.S. Bank. "People are uncertain, and when they're uncertain they're scared."
VOLATILE MARKET: Stocks were coming off a broad rally on Thursday that gave the S&P 500 index its biggest gain since early December. That gain was a reversal from a day earlier, when the market turned in its worst day since September. Behind the market swings are growing investor jitters about the slowdown in China's massive economy, plunging oil prices and the implications those trends may have for U.S. corporations.
OIL PRICES: The price of crude oil fell to the lowest level since 2003. Benchmark U.S. crude fell $1.78, or 5.7 percent, to $29.42 a barrel in New York. Brent crude, a benchmark for international oils, fell $1.79, or 5.8 percent, to $28.94 a barrel in London. The steep slump in crude from over $100 a barrel in the summer of 2014 has eviscerated energy company profits and made it much harder for them to pay off their debts.
SECTOR VIEW: The 10 sectors in the S&P 500 index moved sharply lower. Energy and financials stocks were down the most, about 4 percent.
TIED TO OIL: Several oil, gas and mining companies were down sharply along with oil prices. Marathon Oil slid $1.16, or 12.79 percent, to $7.91. Chesapeake Energy fell 37 cents, or about 9.8 percent, to $3.35. Consol Energy lost 53 cents, or 9.4 percent, to $5.09. Chevron shed $3.13, or 3.7 percent, to $82.34.
COMPUTER PROBLEMS: Intel dropped 9 percent after the chipmaker posted its fourth-quarter results, noting its personal computer business continues to slump. The stock was the biggest decliner in the Dow. It fell $2.95 to $29.78.
ROUGH QUARTER: BlackRock dropped 5.4 percent after the investment firm's fourth-quarter profit fell short of Wall Street forecasts. The stock lost $16.85 to $293.15.
VEGAS, BABY: Wynn Resorts jumped 9.1 percent after the casino operator said it expects to report a larger operating profit from its Las Vegas business. The stock climbed $4.70 to $56.20.
DISCOURAGING DATA: The Federal Reserve said U.S. industrial production, which includes manufacturing, mining and utilities, dropped in December for the third month in a row. A separate report from the Commerce Department indicated U.S. retail sales dipped last month. Meanwhile, a measure of inflation before it reaches consumers declined in December.
EUROPE: Stocks opened higher in Europe but quickly fell. Germany's DAX lost 2.5 percent, while France's CAC 40 dropped 2.4 percent. Britain's FTSE 100 dropped 1.9 percent.
ASIA'S DAY: In China, the Shanghai Composite Index finished down 3.6 percent, sliding to its lowest close since Dec. 8, 2014. China's official Xinhua News Agency reported that banks' new loans during the last month fell over a year earlier, in a sign that momentum for the credit that fuels economic growth was slowing. Hong Kong's Hang Seng dropped 1.5 percent. Japan's Nikkei 225 lost 0.5 percent and South Korea's Kospi slid 1.1 percent.
BONDS AND CURRENCIES: Bond prices rose. The yield on the 10-year Treasury note fell to 2.03 percent from 2.09 percent late Thursday. The euro rose to $1.0955 from $1.0862, while the dollar fell to 116.77 yen from 118.15 yen.
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