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Stock Volatility Continues as Rising Oil Prices Help Erase Early Losses Volatility Continues as Rising Oil Prices Help Wall St. Erase Early Losses
(about 3 hours later)
The new year began on Wall Street with a new round of choppy trading, as stocks opened sharply lower but recouped their losses by late morning after a surge in crude oil prices. The new year began with another round of choppy trading on Wall Street, as stocks opened sharply lower but recouped their losses after a rise in oil prices lifted shares of energy producers.
Volatility has been a defining characteristic of the stock market lately. Investors are trying to gauge the odds of an economic slowdown in the United States, and how such an event might be affected by rising interest rates, uncertainty in American politics and a trade war with China.Volatility has been a defining characteristic of the stock market lately. Investors are trying to gauge the odds of an economic slowdown in the United States, and how such an event might be affected by rising interest rates, uncertainty in American politics and a trade war with China.
The tone on Wednesday was initially set by fresh evidence that the Chinese economy, the world’s second-largest, is slowing. Major benchmarks in Asia declined and shares in Europe bounced back after early losses.
Crude oil jumped more than 3 percent, and energy stocks were among the best performers in the S&P 500. The American crude benchmark was trading as high as $47.55 a barrel by late morning. Oil prices experienced their first decline in three years in 2018, amid worries about excess supply and softer demand.
[Wall Street’s stock pickers are still hopeful about the year ahead, but here are four things they’re worried about.][Wall Street’s stock pickers are still hopeful about the year ahead, but here are four things they’re worried about.]
The bad economic news from China involved a drop in factory activity in the country month, according to government and private measures released this week. The dour numbers indicated that the trade war between China and the United States was beginning to weigh on the Chinese manufacturing sector. The tone on Wednesday was initially set by fresh evidence that the Chinese economy, the world’s second largest, is slowing. Factory activity in the country fell last month, according to government and private data released this week, an indication that the trade war is beginning to weigh on Chinese manufacturing.
The Hang Seng in Hong Kong dropped 2.8 percent. In China, the Shanghai Composite index fell 1.2 percent and the Shenzhen Composite index closed 0.9 percent lower But a spike in crude oil futures helped Wall Street overcome the slump after Bloomberg released data that indicated exports from Saudi Arabia had slowed. The American crude benchmark rose as high as $47.78 a barrel before ending the day at $46.54, up 2.5 percent. In 2018, oil prices experienced their first decline in three years, amid worries about excess supply and softer demand.
After falling more than 1.5 percent in early trading, the S & P 500 ended slightly higher for the day. The technology-heavy Nasdaq composite fared better, rising 0.5 percent.
Shares in oil companies like Exxon Mobil tracked the gains in crude oil, rising more than 2 percent. Other standouts in Wednesday trading included gaming companies like Wynn Resorts, which rose 5.6 percent after the authorities in Macau reported that gaming revenue there rose more than 16 percent in December. Wynn and other American casino operators have a large presence in the territory, which is a destination for wealthy Chinese gamblers.
Also notable on Wednesday was a drop in shares of Tesla, the electric carmaker. The stock dropped 6.8 percent after the company announced a price cut that could suggest softer demand.
Shares in Asia were broadly lower after the weaker factory data from China. The Hang Seng in Hong Kong dropped 2.8 percent. In China, the Shanghai Composite index fell 1.2 percent and the Shenzhen Composite index 0.9 percent.
The Taiex index in Taiwan fell 1.8 percent, while the Kospi in South Korea was down 1.5 percent. Japan’s markets were closed for a holiday.The Taiex index in Taiwan fell 1.8 percent, while the Kospi in South Korea was down 1.5 percent. Japan’s markets were closed for a holiday.
Manufacturing data for the eurozone that was released on Wednesday also showed an across-the-board slowdown in December. But after dipping more than 1 percent to start the day, the Euro Stoxx 50 was essentially unchanged by late afternoon. Manufacturing data for the eurozone that was released on Wednesday also showed an across-the-board slowdown in December. But stock benchmarks in Europe also ended well off their lowest levels of the day. After dipping more than 1 percent, the Euro Stoxx 50 was down by 0.33 percent.