Stocks slide as oil rout intensifies.
The U.S. stock market tumbled on Friday, as reeling oil prices dragged energy companies along for the ride.
All of Wall Street’s major indices headed lower on Friday. The Dow Jones Industrial Average (DIA) fell 112.59 points, or 0.4%, to 28,051.41.
The broad S&P 500 Index (SPY) declined 0.4% to close at 3,140.98. All 11 major sectors finished in negative territory, with energy shares leading the decline. Consumer discretionary stocks were a close second, followed by industrials and materials.
Meanwhile, the technology-focused Nasdaq Composite Index (QQQ) declined 0.5% to settle at 8,665.47.
A measure of implied volatility known as the CBOE VIX (VXX) rose on Friday, as the normally calm trading conditions on Wall Street eroded slightly. The so-called “investor fear index” touched a session high of 12.83 on a scale of 1-100 where 20 represents the historic average. It would eventually settle at 12.62, having gained 7.4%.
In commodity markets, oil prices tanked on Friday amid news that OPEC’s biggest members aren’t willing to extend output cuts – something that would exacerbate the supply glut.
The West Texas Intermediate (WTI) benchmark for U.S. crude futures plunged $2.69, or 4.6%, to $55.42 a barrel on the New York Mercantile Exchange. ICE Brent, the global benchmark, declined $1.44, or 2.3%, to $62.43 a barrel.
The Final Word: Stocks remain in a prolonged uptrend – one that could extend into early next year. The only thing threatening Wall Street’s continued rally is a recession or major breakdown in U.S.-China trade talks. At this stage, the latter seems more likely.