U.S stocks joined a global rout on Friday, with major indexes off more than 2 percent, as nervous investors reacted to crude's slide below $30 a barrel and Chinese shares stumbling into a bear market.
Weaker-than-expected U.S. retail sales further dampened investor sentiment, with 2015 proving to be the softest year in six.
"The markets were on edge overnight, China had a difficult session again, Europe followed right in line, and then we had a series of weak economic numbers specific to the United States," said Jim Russell, portfolio manager at Bahl & Gaynor. "There are sectors and areas of the United States doing well economically, but even they are starting to roll over a little bit.
"The market volatility over the last two weeks of the year probably doesn't help consumer sentiment. People are saying what is going on, so they basically sit on their hands and don't spend money."
Erasing the prior day's gains, and after a 500-point fall, the Dow industrials (DJI) were down 391 points, or 2.4 percent, at 15,988. The S&P 500 (SPX) dropped 42 points, or 2.2 percent, to 1,880, with technology and energy pacing losses among its 10 major industry groups, all of which were in in the red. The Nasdaq Composite shed 127 points, or 2.7 percent, to 4,488.
Intel (INTC) lost 9 percent after the semiconductor maker forecast first-quarter sales below estimates.
"We do feel this sloppy end to the calendar year in terms of earnings is going to carry over, and that the markets are adjusting to lower earnings expectations now," said Russell, who also noted "some emotion in the market." But concerns of a recession ahead are overblown, he added.
Citigroup (C) reported fourth-quarter profit that topped expectations, as did earnings from Wells Fargo (WFC). But shares of both declined, with Citi off more than 6 percent and Wells Fargo off 4 percent.
Trading at 12-year lows as Iran readies to export oil into an already supply-heavy market, the price of U.S. crude fell under $30 a barrel. Energy companies around the world are laying off employees with the price of oil not yet finding a floor; markets are bracing for the possible lifting of international sanctions on Iran, a member OPEC, in the coming days.
Oil's plunge to a 12-year low has also roiled global markets amid worries that Chinese policy moves are not succeeding in bolstering growth in the the world's second-biggest economy.
The yield on the 10-year Treasury note used to figure mortgage rates and other consumer loans dropped under 2 percent for the first time since October.
In the first nine days of trading this year, stocks around the world have lost a total of $5.7 trillion, roughly equivalent to the GDP of France and the U.K. put together, according to Bank of America Merrill Lynch.