US close
The Dow Jones industrial average plunged 367 points on Friday, registering its biggest daily fall since the beginning of September.
The Dow closed at 17,128, while the broader-based S&P 500 gave up 36 points to finish the week on 2,006 and the tech-laced Nasdaq Composite surrendered 79 points to close at 4,923.
The slumping oil price continued to depress oil & gas stocks while banking companies also got it in the neck on fears that loans made to energy companies might have to be restructured.
Online marketing firm ReachLocal (NASDAQ:RLOC) defied the trend in style, shooting up 68% to 69 cents after raising its earnings outlook for the final quarter of the year.
That gain was almost matched by Nanosphere (NASDAQ:NSPH), which rose 65% after it announced the pricing of a public offering of common stock (and common stock equivalents) with expected total gross proceeds of around US$10 million.
The stock is to be lobbed out at 47 cents a share, versus Thursday's closing price of 48 cents. The shares rose 28 cents on the news.
Mid-session wrap
A disappointing flash services Purchasing Managers Index (PMI) reading has accelerated the decline of stocks on Wall Street.
The PMI reading came in at 53.7 versus expectations of 55.9.
The S&P was down 1.3% at 2,015 in lunchtime trading while the Dow Jones average was off 1.7% at 17.204 and the Nasdaq Composite was 1.1% lower at 4,947.
A so-called quadruple witching hour, when index futures, stock futures, index options and stock options all expire at the same time, has added to the risk-averse mind-set.
Open source software services provider Red Hat (NASDAQ:RHT) defied the trend, rising 3.8% on the back of better than expected results released after the bell last night.
In contrast, Cytori Therapeutics (NASDAQ:CYTX) fell out of bed, losing more than a quarter of its value, after it entered into agreements with holders of its warrants and updated on its cash burn rate.
US open
The weaker trend of yesterday continued at the outset with nothing in the way of economic data to encourage markets to change course.
After just over half an hour of trading, the Dow Jones industrial average was down 163 points at 17,333, the S&P 500 was off 16 points at 2,025 and the Nasdaq Composite was 26 points lower at 4,977.
The weak oil price remained a drag on the major benchmarks, with West Texas intermediate for January delivery still costing less than US$35 a barrel.
Among the large caps, Darden Restaurants (NYSE:DRI) defied the trend after topping expectations with its fiscal second quarter trading update. The shares rose
6.3%.
Smartphone maker BlackBerry (NASDAQ:BBRY, TSE:BB) was juiced up after its trading update, which showed a massive increase in software licensing revenue. The Canadian company's shares rose 9% to US$8.50 in New York trading.
In the minnows' end of the pool, Uranium Resources (NASDAQ:URRE) shed 16% at US$0.455 after issuing shares at 40 cents a pop to raise around US$1mln.
Pre-open
The slide on Wall Street picked up pace towards the close yesterday, and that trend is set to be continued this morning.
The major benchmarks are set to open sharply lower against the background sound of traders closing positions ahead of the holiday season, as a precaution in case the oil price slumps further.
Spread betting quotes point to the S&P 500 opening at around 2,029, down 13 points. The Dow Jones average is headed for a triple digit fall and is tipped to open at 17,392, down 104 points.
With the Fed rate hike now consigned to the history books, focus has moved to the state of the world economy, suggests Michael Hewson, chief market analyst at spread betting outfit CMC Markets.
“According to a survey of economic conditions in China, carried out by a US based independent body, modeled on the US Beige Book, the overall picture showed that the economy deteriorated in the fourth quarter. The survey pointed to 'pervasive weakness' across the board raising concerns about the effectiveness of recent attempts to stimulate a recovery in the world’s second biggest economy,” Hewson noted.