Dow sheds 200 as Europe plunges; S&P off 1%

Trader on the floor of the New York Stock Exchange.

Lucas Jackson | Reuters
Trader on the floor of the New York Stock Exchange.

U.S. equities fell sharply Thursday sharply lower as investors digested a massive global sell-off, while oil prices fell further.

“The Chinese H share index didn’t wait until the mainland opening on Monday and closed overnight with a near 5% drop to a level last seen in March 16th 2009,” Peter Boockvar, chief market analyst at The Lindsey Group, said in a note.

Trading in mainland China is closed this week due to the Lunar New Year Holiday.

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European stocks fell nearly 3 percent as banks in the region plunged, with Deutsche Bank dropping 6.5 percent and UBS falling 3 percent. On Wednesday, European banks soared, momentarily halting a massive plunge.

The sell-off in global equities sent traditional safe havens surging.

Gold futures for April delivery gained $45.60 to trade at $1,1240.20, while U.S. 10-year note yields traded at 1.59 percent. The benchmark note yield also went below 1.55 percent momentarily.

“The central banks have lost control of the situation,” said Peter Cardillo, chief market economist at First Standard Financial. “If this continues, there’s real trouble ahead.”

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The Dow Jones industrial average fell more than 150 points at the open, as Goldman Sachs weighed the most.

Investors also kept an eye on falling oil prices, as WTI futures hit their lowest levels since 2003.

In midmorning trading, U.S. crude was 56 cents lower, or 2 percent, at $26.89 a barrel.

“As of yesterday, oil has moved 5 percent 24 of the 26 trading days this year,” said Art Hogan, chief market strategist at Wunderlich Securities. “That doesn’t happen. … That is more than we would see in an average year.”

On the data front, U.S. weekly jobless claims came in at 269,000, below estimates. However, “we’re ignoring the fact that there’s good news,” Hogan said.

U.S. futures fell sharply on Thursday, with Dow futures briefly falling more than 300 points. On Wednesday, stocks failed to hold a rally that lasted most of the session, as the Dow and S&P both closed lower.

“Yesterday we had the perfect setup for a constructive day,” Hogan said. “And it all collapsed on us. Oil fell and everyone fell with it.”

Investors will also keep an eye on Fed Chair Janet Yellen, who is scheduled to testify for a second day in front of Congress.

DJIA Dow Jones Industrial Average 15689.32 -225.42 -1.42%
S&P 500 S&P 500 Index 1828.42 -23.44 -1.27%
NASDAQ Nasdaq Composite Index 4237.29 -46.30 -1.08%

On tap this week:


Earnings: CBS, KKR, FireEye, AIG, Activision Blizzard

10 a.m.: Fed Chair Janet Yellen testifies before Senate Banking Committee

1 p.m.: 30-year bond auction


Earnings: Red Robin Gourmet Burgers, Calpine, Buckeye Partners, Interpublic, Ventas, Brookfield Asset Management

8:30 a.m.: Retail sales; import prices

10 a.m.: Consumer sentiment; business inventories; New York Fed President William Dudley speaks on household debt and credit

*Planner subject to change.

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