Global markets were also rattled after North Korea said it had conducted its first successful test of a hydrogen bomb. Experts in South Korea and the U.S. doubted that the country had made that breakthrough, but the announcement still caused alarm.
The Dow Jones industrial average dropped 252.15 points, or 1.5 percent, to 16,906.51. The Standard & Poor’s 500 index lost 26.45 points, or 1.3 percent, to 1,990.26, for its fourth loss in five days. The Nasdaq composite gave up 55.67 points, or 1.1 percent, to 4,835.76.
U.S. benchmark crude sank $2, or 5.6 percent, to close at $33.97 a barrel in New York, its lowest price since December 2008. Brent crude, a benchmark for international oils, fell $2.19, or 6 percent, to close at $34.23 a barrel in London. Southwestern Energy fell 96 cents, or 12.6 percent, to $6.69 and Marathon Oil declined $1.48, or 11.6 percent, to $11.28.
France’s CAC 40 shed 1.3 percent and Germany’s DAX dropped 0.9 percent. Britain’s FTSE 100 fell 1 percent. Japan’s Nikkei 225 index lost 1 percent and South Korea’s Kospi fell 0.3 percent. Hong Kong’s Hang Seng shed 1 percent. The Shanghai Composite Index in mainland China rebounded 2.3 percent as the Chinese government said it will keep some market-stabilizing measures in place.
Stocks also plunged Monday on signs of weakness in China’s manufacturing sector. The Shanghai Composite skidded almost 7 percent that day and also fell on Tuesday.
U.S. government bond prices rose Wednesday as the turbulent stock market made bonds more appealing. The yield on the 10-year Treasury note fell to 2.17 percent from 2.24 percent.
The markets have endured a rough few days to start 2016. J.J. Kinahan, chief markets strategist for TD Ameritrade, said that’s making bonds attractive.
Other energy prices also slipped. The price of wholesale gasoline sank 9.5 cents, or 7.6 percent, to $1.162 a gallon after the U.S. government said inventories of gas climbed by 10.6 million barrels last week. Citi Investment Research analyst Edward Morse said that was the biggest weekly increase since 1993. Heating oil sank 4.5 cents, or 4 percent, to $1.081 a gallon. Natural gas declined 5.6 cents, or 2.5 percent, to $2.267 per 1,000 cubic feet.
Auto retailer AutoNation said it had to offer large discounts in December, especially on luxury vehicles. The company said it will report smaller profits per vehicle in the fourth quarter. The stock dropped $5.98, or 10.5 percent, to $50.76.
The euro edged up to $1.0788 from $1.0744. The dollar fell to 118.38 yen from 118.97 yen late Tuesday. The price of gold rose $13.50, or 1.3 percent, to $1,091.90 an ounce. Silver inched up 0.5 cents to $13.976 an ounce. Copper slid 0.8 cents to $2.088 a pound.