Stocks Sink with Oil Prices

The energy sector led the way down for stocks during Wednesday’s trading session as oil prices continued their descent. After falling 2.3 percent on the day, WTI crude oil is now being called WTF crude. The entire commodities sector had a bad day. Financials were in the red following an earnings miss by Bank of America (BAC).

Tech stocks suffered as Apple (AAPL) briefly dipped below $400 per share to close at $402 for a loss of 5.5 percent. The Dow Jones Industrial Average (DIA) lost 138 points to hit 14,618 for a 0.94 percent slump. The S&P 500 (SPY) sank by 1.43 percent to close at 1,552.

The Nasdaq 100 (QQQ) fell 1.99 percent to 2,781. The Russell 2000 (IWM) dropped 1.79 percent to end the day at 906.

In other major markets, oil (USO) sank 2.36 percent to close at $31.01.

On London’s ICE Futures Europe Exchange, June futures for Brent crude oil declined by $2.43 (2.43 percent) to $97.48/bbl. (NYSEARCA:BNO).

June gold futures declined by $11.00 (0.79 percent) to $1,376.40 per ounce (GLD).

Transports went into reverse on Wednesday, with the Dow Jones Transportation Index (IYT) retreating 1.51 percent.

The major European stock indices continued their decline on Wednesday after reports that construction in the Eurozone declined by 0.8 percent in February and the British unemployment rate rose to 7.9 percent. The Euro STOXX 50 Index finished Wednesday’s trading session with a 2.14 percent nosedive to 2,553 – remaining below its 50-day moving average of 2,648. Japan’s Nikkei 225 Stock Average surged 1.22 percent to 13,382 as the yen continued its downward trajectory toward becoming the yenny (EWJ).

In China, the Shanghai Composite Index dipped 0.05 percent to 2,193 (FXI) and Hong Kong’s Hang Seng Index declined by 0.47 percent to 21,569 (EWH).

Technical indicators reveal that the S&P 500 nearly tagged its 50-day moving average of 1,542.43 after reaching Wednesday’s low of 1,543. Its Relative Strength Index has fallen to 47.88 and the MACD fell further below the signal line, suggesting more downward momentum.

For the day, all sectors finished solidly in negative territory. The energy and tech sectors made steep declines. “Defensive” sectors demonstrated why they are advantageous during downturns as the healthcare and utilities sectors sustained less-significant setbacks than the other areas.

Consumer Discretionary (XLY): -1.02%

Technology: (XLK): -2.05%

Industrials (XLI): -1.66%

Materials: (XLB): -1.47%

Energy (XLE): -2.18%

Financials: (XLF): -1.96%

Utilities (XLU): -0.55%

Health Care: (XLV): -0.46%

Consumer Staples (XLP): -0.91%

Bottom line: The major American stock indices made steep declines on Wednesday as oil prices continued to fall, the entire commodities sector sank, Bank of America fell short of its earnings estimate and Apple briefly crossed below $400 per share.

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