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US stocks closed lower after a session cut short Friday, pushing the S & P 500 benchmark correction, or falling 10% below its last high in September.
Energy companies led the market down as US crude oil prices dropped to their lowest level in more than a year, reflecting traders' concern over the slowdown in the global economy likely to weigh the demand for oil.
"Oil is falling sharply and going downhill, which seems to give investors a lot of fears about the slowdown in global growth," said Jeff Kravetz, Regional Investment Director of the US Private Bank, Wealth Management. "You have that, then you have recent sales in the technology and retail sectors, then trade tensions and rising rates."
Losses in technology and Internet companies as well as in banks offset gains in health care stocks and household goods. Several large retailers have retreated, investors having monitored Black Friday looking for signs of a strong holiday shopping season.
The volume of transactions was smaller than usual as the markets were only open for half a day after the Thanksgiving holiday.
The S & P 500 index fell 17.37 points, or 0.7%, to 2,632.56. The index is now down 10.2% from its last historic high on September 20th. The last time the index was corrected is in February.
The latest correction comes as investors fear that corporate profits, a key factor in stock market gains, will weaken next year.
"The market is reviewing its pricing and is trying to assess its position early in 2019," said Quincy Krosby, chief market strategist at Prudential Financial.
The Dow Jones Industrial Average Index lost 178.74 points, or 0.7%, to 24,285.95. The Nasdaq Composite lost 33.27 points, or 0.5%, to 6,938.98. The Russell 2000 Small Cap Index rose 0.40 percentage point, or 0.03%, to 1,488.68.
Crude oil prices fell for the seventh consecutive week, fearing that a slowdown in the global economy will hurt demand, even though oil production has risen.
The benchmark crude oil contract slid 7.7% to $ 50.42 a barrel in New York. This is the lowest level since October 2017. Brent crude, the international standard, lost 6.1% to close at $ 58.80 a barrel in London.
Saudi Arabia and other OPEC members have recently indicated that they are willing to consider cuts in production at the oil cartel meeting to be held on the month of next. The United States is putting increasing pressure on Saudi Arabia and OPEC to not cut production, which could drive prices down further.
Falling oil prices weighed on energy stocks. Concho Resources, a developer and explorer of oil and natural gas properties, fell 6.3% to $ 126.96.
Tesla dropped 3.7% to 325.83 USD after the automaker announced plans to cut prices for its X and S models in China to make them more affordable.
Merchants had an eye on retailers as early as Black Friday, the traditional beginning of the crucial holiday shopping season. The shares of L Brands, operator of Victoria's Secret and Bath & Body Works, rose 2% to $ 29.97. Other retailers are putting investors in a sales mood. Kohl fell 3.7% to $ 63.83, while the target lost 2.8% to $ 67.35. Macy's dropped 1.8% to $ 32.01.
Rockwell Collins climbed 9.2% to $ 141.63 after Chinese regulators conditionally approved the sale of the manufacturer of electronic communications and aviation systems to United Technologies Corp.
Investors will watch the meeting between presidents Xi Jinping and Trump next week at the Group of 20 summit in Argentina, looking for signs that the two leaders can find common ground to begin solving the pending dispute .
The trade dispute between the United States and China has weighed on the market, causing concern among traders that billions of dollars in tariff increases imposed by the two countries on their goods will hurt profits. companies at a time when the global economy seems to be slowing down.
"If you can get President Trump and President Xi to get closer to their speeches and make some progress on the trade front, they could spur markets up," Kravetz said.
It may take more than a meeting to resolve deep issues between Washington and Beijing, who resumed talks over their burgeoning trade dispute earlier this month. According to the Wall Street Journal, the United States has asked its allies to stop using telecommunication equipment from Huawei, a Chinese company. The report quoted people familiar with the subject.
Bond prices fell on Friday. The yield on the 10-year Treasury bill rose from 3.04% to 3.05% on Wednesday night.
The dollar fell to 112.85 yen against 113.06 yen Wednesday night. The euro has weakened from 1.1338 USD to 1.1335 USD. The pound went from $ 1.2788 to $ 1.2804.
Gold fell 0.4% to $ 1,223.20 an ounce. Silver fell 1.8% to 14.24 dollars an ounce. Copper slid 1% to $ 2.77 per pound.
In other commodity trading, wholesale gasoline plunged 7.9% to $ 1.39 a gallon. Heating oil lost 4.8% to $ 1.88 per gallon. Natural gas declined 3.2% to $ 4.31 per 1,000 cubic feet.
Major European indices have mostly finished rising, after unlocking a first slide.
Traders were weighing the latest developments in negotiations for the UK's exit from the European Union. Both parties were finalizing the terms of the divorce Friday and are expected to sign the agreement Sunday, although it is unclear whether the British parliament will agree.
The FTSE 100 index of the main UK stocks fell by 0.1%. The German DAX index rose 0.5%, while the French CAC 40 gained 0.2%.
Earlier in Asia, South Korea's Kospi lost 0.6% and Hong Kong's Hang Seng Index fell 0.4%. The Australian S & P / ASX 200 bucked the trend, gaining 0.4%. Shares fell in Taiwan and rose in Singapore, Thailand and Indonesia. Japanese markets were closed for holidays.
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