Bank stocks, fears for growth and new oil price nadirs helped push Wall Street indices south on Thursday.
US shares started on the backfoot, extending the downbeat mood of bourses in Asia and Europe, with the S&P500 index closing down 1.2% at 1,828.57, the Dow Jones Industrial Average down 1.6% at 15,655.12, and the tech-heavy Nasdaq Composite down 0.4% at 4,264.94.
Investors began to reassess Federal Chairman Janet Yellen's remarks to Congress this week as bearish on the economy's growth prospects and feared a halt to rate hikes.
Insurer, bank and other financial sector stocks were among the biggest percentage fallers as investors computed the impact of prolonged low rates on their profitability and growth structures.
Among them, Lincoln National (NYSE:LNC) dropped by 10.2% to US$30.78, while Prudential Financial (NYSE:PRU) dropped 9.5% to US$58 in heavy volumes after missing Street forecasts in its fourth quarter earnings. Analysts were looking for 2015 earnings of US$2.30 per share but they were handed earnings of US$1.94 per share, down from US$2.12 per share in 2014.
Feeling the heat from Yellen's growth and rate comments Bank of America (NYSE:BAC) dropped 6.8% to US$11.16, while Citigroup came off 6.5% to US$34.98. Others falling included Goldman Sachs (NYSE:GS) down 4.4% to US$140.69 , JP Morgan Chase (NYSE:JPM) down 4.4% to US$53.07 Visa (NYSE:V) down 2.4% to US$68.47, and American Express (NYSE:AXP) down 2.3% at US$51.11.
Oil prices continued to slide. On a continuous contract basis, the US benchmark future, the West Texas Intermediate, fell by 1% to US$27.18 a barrel by the Wall Street close. Earlier in the session it slid down to its lowest levels since April 2003, at US$26.14.
MID-SESSION
Worries about the state of the US and global economy and oil prices at near-13 year lows helped sink Street shares on Thursday.
Bourses from Asia to Europe all saw red this session and this rubbed off on US markets as investors began to reassess Federal Chairman Janet Yellen's remarks to Congress this week as bearish on the economy.
Initially on Wednesday, investors took Yellen's comments to read the US central bank had not run out of ammunition to combat economic strife.
Even US weekly jobless claims lower than forecast did little to cheer investors, other than indicate a robust labour market despite slowing economic growth and the accompanying stock market rout.
The Dow Jones Industrial Average was down 2.2% at 15,568.55, while the S&P500 was down 1.9% at 1,816.66. The tech-heavy Nasdaq Composite was 1.3% lower at 4,227.22.
Oil prices continued to slide. On a continuous contract basis, the US benchmark future, the West Texas Intermediate, was down to its lowest levels since April 2003, at US$27, down 1.3%. Earlier in the day it hit US$26.27.
OPEN
Wall Street stocks took a hit at the open as crude prices fell and traders continue to worry about the state of the global and the US economy.
It comes after more falls in Asia overnight, with the Nikkei shedding 2.32% and the Hong Kong market plunging 4% after reopening after the extended Lunar New Year holiday.
The Dow Jones is down 200 at the time of writing, at 15,721, with all but three constituents in positive territory, while the S&P500 is down 22 points.
The tech heavy Nasdaq index is down 30 at 4,255.
Fed chair Janet Yellen, who is making a two day testimony before Congress, did little apparently to cheer the mood yesterday, after saying the US economy faced headwinds and painted a fairly gloomy global outlook.
There was also the suggestion that further interest rate rises from the Fed would be delayed, fuelling anxiety abou the pace of US growth.
Today's US markets have also not been cheered with data today showing joblessness benefit claims have declined stateside to a seven-week low.
Jobless claims dropped by 16,000 to 269,000 in the week to February 6, a Labor Department report showed Thursday.
A notable gainer in the sea of red was electric car giant Tesla (NASDAQ:TSLA), which surged over 13% to US$163 as traders cheered production guidance for the year ahead and news of the launch of the latest model from the stable.