US stocks sank more than 2.0% early Wednesday, with petroleum stocks diving, joining Asia and Europe in a selloff prompted by sliding oil prices and worries about lower growth.
About 50 minutes into trade, the Dow Jones Industrial Average stood at 15,678.47, down 337.55 points (2.11%).
The broad-based S&P 500 fell 42.06 (2.24%) to 1,839.27, while the tech-rich Nasdaq Composite sank 108.07 (2.41%) to 4,368.88.
US oil prices opened below $28 a barrel, their lowest since September 2003. Analysts said hopes of new Chinese economic stimulus that had lifted stocks on Tuesday were fading.
Lackluster earnings reports also weighed on stocks, with IBM falling 4.5% after the tech giant reported lower revenues for the 15th straight quarter and gave a muted forecast for 2016.
Briefing.com analyst Patrick O’Hare said the S&P 500 is close to dropping below a key technical level that could lead to more selling of stocks.
“Investor sentiment is clearly frayed and it will be put to the test today,” O’Hare said in a note titled, “Same mess, different day.”
Petroleum-linked stocks were hammered again. Dow members Chevron and ExxonMobil lost 5.4 and 3.0%, respectively, while Halliburton shed 5.2%.
US-listed Chinese companies were another weak sector. Alibaba lost 6.2%, JD.com 5.7% and Baidu 2.8%.
Netflix dropped 5.4% despite adding a record 5.6 million members in the final three months of last year, topping market forecasts. However, the streaming service said subscriber growth in the US came in at 1.6 million, less than
the 1.9 million added in the fourth quarter of 2014.
The slower US growth reflects the company’s “high penetration” in its home market, Netflix said.
Goldman Sachs dropped 0.2% after reporting fourth-quarter earnings of $574 million, down 71.8% from the year-ago level due to a hefty charge to settle US litigation alleging it defrauded investors on mortgage-backed securities.