Wall Street and European stocks continued lower on Thursday, as low trading volumes and weak oil prices continued to weigh on investor sentiment in the final day of 2015.
US stocks traded sharply lower on Thursday, with the Dow Jones Industrial Average falling more than 150 points after the opening bell. The blue-chip posted a triple-digit decline on Wednesday and is on pace for a yearly drop of around 2%.
Meanwhile, the S&P 500’s narrow returns for the year were in jeopardy after the large-cap index fell 0.7% on Thursday morning. Nine of its ten sectors reported declines, led by a 1.1% drop in information technology, consumer staples and utilities. Energy shares rebounded slightly, but were still on pace for a yearly drop of around 25%. In total, six of the S&P 500’s ten sectors reported declines for 2015.
Consumer discretionary stocks enjoyed the strongest year of all the major sectors, growing more than 8.5%.
Weak technology stocks also weighed on the Nasdaq Composite Index, which declined 0.8% in the morning session.
European markets were also under pressure on Thursday after turning lower in the previous session. London’s FTSE 100 Index was down 0.5%, extending its yearly loss to 5%. The CAC 40 Index in Paris and IBEX 35 in Madrid were also down around 1%. Frankfurt’s DAX Index was closed for the day.
The pan-European STOXX 600 Index was down 0.5% on the day.
The rout in oil prices moderated on Thursday after a volatile week. The West Texas Intermediate (WTI) benchmark for US crude edged up 11 cents or 0.3% to $36.71 a barrel on the New York Mercantile Exchange. Global benchmark Brent crude also rose 33 cents or 0.9% to $36.79 a barrel on ICE Futures Europe.
The economic calendar was largely irrelevant in the final trading day of the year. US jobless claims rose sharply last week, climbing 20,000 to a seasonally adjusted 287,000, the Labor Department said. That was the highest reading since July, signaling that temporary holiday factors were impacting the US labour market.
Separately, the Chicago purchasing managers’ index of economic activity in the US Midwest plunged to its lowest level since 2009. The December PMI reading fell to 42.9 from 48.7 a month earlier. Economists forecast a slight improvement to 49.8. A PMI reading below 50 is a sign of contraction in the economy.
Despite weak economic data, the US dollar continued to strengthen, rising for a fourth consecutive day against a basket of world currencies. The dollar index climbed to a session high of 98.56. It would subsequently consolidate at 98.42, advancing 0.2%.
Based out of Toronto, Canada, Husni Sam Borji is senior macroeconomics analysts who contributes regularly to TradersDNA, where he examines the global financial markets. Husni Sam has authored dozens of government reports and industry whitepapers, as well as thousands of financial articles. Husni Sam holds a BA from the University of Windsor and a Master’s degree in Economic Public Policy from McMaster University.
His expertise includes macroeconomics, fundamental analysis, industry research and global political economy.