U.S. stock indices sold off heavily today as expectations of more stimulus in China was eclipsed by yet another very steep drop in oil prices, at one point by more than 7%. Gains that began yesterday morning for U.S. equities were quick to evaporate, which was only a preview of today’s heavy selloff, breaching the S&P 500 low hit during the August 24th crash as well as the Dow Jones.
Oil continues making new lows as both Brent Crude futures and U.S. Oil futures are trading at sub-$30 levels. Brent crude is trading at $27.50 per barrel while NYMEX breached the 2003 level at $27.32 before rebounding to $27.59, 87 cents down from yesterday. The International Energy Agency (IEA) has already said that the oil glut is not likely to resolve until the end of 2016.
On the currency front, the U.S. dollar index, which measures the strength of dollar against a basket of global currencies fell to 99.11. Investors are closely watching for more strong U.S. data that can point to rate hike by the Federal Reserve after last week’s data failed to meet expectations.
Major industrials like International Business Machines Cop. (NYSE: IBM) and Royal Dutch Shell plc (NYSE: RDA.A) reported dull fourth-quarter earnings today. Netflix, Inc. (NASDAQ: NFLX) was up after posting earnings above analyst projections.