US markets followed the global trend on Monday and had one of the worst first trading days of the year in recent memory.
The S&P 500 made its worst start to the year in 15 years, shedding 1.5% at 2,013 while the Dow Jones Industrial Average declined 1.6% to 17,149. The tech-heavy Nasdaq was harder hit, shedding 2.1% at 4,903, as investors banked profits on Netflix and Amazon (NASDAQ:AMZN), both of which had stellar years in 2015.
The only consolation was that records show that the first day of trading is no guide to how a stock market is likely to perform over the course of the year.
While last year's stock market stars were getting a kicking, the ugly ducklings in the energy sector bucked the trend, with the likes of Southwestern Energy and Range Resources heading higher.
Mid-session
US stocks opened sharply lower and continued heading south as investors fretted over rising tensions in the Middle East and slowing growth in China.
Energy stocks have provided some bright sports as traders wrestle with the implications of the breaking of diplomatic ties between Saudi Arabia and Iran.
Among blue-chips, Chesapeake Energy (NYSE:CHK) is the top performer, up 4.2%, while Southwestern Energy (NYSE:SWN) was up 2.5% in a market down 2.25%.
The S&P 500 slipped back below the 2,000 level and was down 47 points in lunchtime trading at 1,997, while the Dow Jones Average was off 404 points at 17, 021. The tech-heavy Nasdaq Composite was down 132 points at 4,875, with media streaming pioneer Netflix (NASDAQ:NFLX) leading the retreat, down 6.2%, as Baird Equity downgraded the stock to 'neutral' from 'outperform'.
Despite the shake-out there were still some stocks sporting handsome gains, such as Axsome Therapeutics (NASDAQ:AXSM), which advanced 15.6% as it revealed it would present at the 8th Annual Biotech Showcase 2016 conference on January 13.
The company's chief executive officer, Herriot Tabuteau, will provide an overview of Axsome’s business and late-stage clinical product candidates, AXS-02 and AXS-05.
3D Systems (NYSE:DDD) jumped almost 12% as it announced the immediate commercial availability of the ProX DMP 320, the latest addition to the company’s line of direct metal 3D printers.
US open
US stocks opened sharply lower, as investors took fright over the continuing slowdown of Chinese economic growth.
The December Caixin manufacturing Purchasing Manager's Index was well below the 50-point level that marks the divide between contraction and expansion, coming in at 48.2.
The release of the data this morning sparked a mass sell-off in global markets, and the US has followed suit, with the Dow Jones Average off 351 points at 17,074, the S&P 500 down 38 at 2,006 and the Nasdaq Composite 137 points weaker at 4,871.
“Sporadically threatening to dive past the 400 point plunge mark, the Dow saw a slightly better than expected, but still over-3 year low, Markit manufacturing PMI joined by an ISM manufacturing figure that came in at a truly dismal 48.2 against the 49.1 forecast. It paints a worrying picture of the US manufacturing landscape, one that exacerbated the already intense (China-inspired) fears that had arisen this Monday and helped the European indices double down on their losses,” noted Connor Campbell of spread betting firm Spreadex.
Defying the trend in early trading was medical technology outfit Unilife (NASDAQ:UNIS), up 66%. The company has inked a deal with Amgen (NASDAQ:AMGN) to license some of its proprietary technologies.
Unilife has granted Amgen the right to develop, manufacture and supply wearable injector devices for use with certain large volume drug products of Amgen, for which it has received a US$15mln non-refundable deposit.
Amgen shares dipped 3% on the news, but Unilife's sector peer, Akers Biosciences (NASDAQ:AKER, LON:AKR), seemed buoyed by increased interest in the sector.
Shipping stocks were on offer following further evidence of the slow-down in the Chinese economy, with Pyxis Tankers (NASDAQ:PXS), down 16.7%, and DryShips (NASDAQ:DRYS), down 11.4%, two of the hardest hit.
Pre-open
Investors are advised to don their tin hats this morning after China suspended trading in its stock markets because of heavy losses.
According to spread betting quotes, the Dow Jones average is set to drop 300 points at the outset, while the S&P 500, which closed 2015 at 2,044, is set to start the New Year at around 2,008.
Trading on both the Shanghai and Sheen exchanges was suspended this morning. The former dropped almost 7% - or more than 250 points – after worse than expected manufacturing data.
The fall-out was felt across the region with the Nikki in Japan and the Hang Sen. in Hong Kong both tumbling 3%.
Adding to the tension was the severing of diplomatic ties between Saudi Arabia and Iran yesterday, after Iranian protesters camped out on Saudi Arabia's embassy in Tehran to complain about the execution by Saudi Arabia of Shiite dissident, Nimr al-Nimr.
The oil price initially shot up on the news but gains were quickly pared, and circa 8.00am West Texas Intermediate for February delivery was trading just 26 cents higher at US$37.30 a barrel.