By Ellie Ismailidou and Sara Sjolin, MarketWatch

CPI, housing-starts data offer mixed picture of U.S. economy

The Dow industrials plunged more than 300 points Wednesday as a renewed rout in oil prices and global equities triggered a selloff on Wall Street.

The S&P 500 was down 41 points, or 2.2%, at 1,840 falling below its Aug. 25 closing low of 1867.61--a level viewed as key technical support point for the S&P, suggesting further moves lower may be ahead.

The energy sector was the worst performer on the S&P 500, down 4%, led by Chesapeake Energy's (CHK) 9.5% tumble.

The Dow Jones Industrial Average dropped 332 points, or 2%, to 15,690 and the Nasdaq Composite was off 97 points, or 2.2%, at 4,381.

International Business Machines Corp. shares (IBM), retreated 4.2% after the computer maker late Tuesday reported a drop in fourth-quarter earnings (http://www.marketwatch.com/story/ibm-profit-falls-on-lower-revenue-2016-01-19-164854141). The move in Big Blue was contributing nearly 40 points to the blue-chips benchmark's decline.

The stock-market rout came as stocks racked up sharp losses world-wide, fueled by oil falling below $28 (http://www.marketwatch.com/story/oil-prices-hit-fresh-12-year-low-under-28-a-barrel-2016-01-20) a barrel and worries over an economic slowdown in China and other developing markets.

"The fledgling hope from yesterday that markets were on the turn has been quashed by sharp overnight falls in Japan and Asia," said Rebecca O'Keeffe, head of investment at stockbroker Interactive Investor, in a note.

Read:IBM needs software to save it from prolonged downfall (http://www.marketwatch.com/story/ibm-needs-software-to-save-it-from-prolonged-downfall-2016-01-19)

Meanwhile, a flurry of economic data offered a mixed picture of the U.S. economy, but did little to hearten the gloomy sentiment hurting the market.

The U.S. consumer-price index dropped 0.1% in December, (http://www.marketwatch.com/story/inflation-falls-again-in-december-cpi-finds-2016-01-20) but core CPI, which excludes food and energy, rose 0.1%. Though the headline number came in lower than expected, the core was in line with economists' expectations. For all of 2015 inflation rose just 0.7%, the second slowest rate in 50 years.

Housing starts fell 2.5% last month (http://www.marketwatch.com/story/housing-starts-fall-25-in-final-month-of-2015-2016-01-20), missing economists' expectations, and indicating that home builders cut back slightly on new construction in the final month of 2015.

Meanwhile, in Asia (http://www.marketwatch.com/story/hong-kong-stocks-hit-312-year-low-japan-nears-bear-market-2016-01-19), Japan's Nikkei slid into bear market territory, which marks a 20% slump from a recent high. And in Europe, markets were lower across the board, with the Stoxx Europe 600 index almost 3% and on track for its lowest close since late 2014.

"With every upturn being followed by deeper falls, investors are increasingly wary as it becomes more and more difficult to determine what might happen next," O'Keeffe said.

Read:China's problems now spilling into Hong Kong (http://www.marketwatch.com/story/have-investors-lost-faith-in-hong-kong-as-well-as-in-china-2016-01-19)

The S&P 500 index and Dow industrials closed marginally higher on Tuesday (http://www.marketwatch.com/story/dow-futures-rise-by-200-points-as-stocks-try-to-rebound-2016-01-19) following a rally in Europe, while the Nasdaq Composite closed down 0.3%.

Oil blues: Crude oil hit fresh 12-year lows to trade below $28 a barrel (http://www.marketwatch.com/story/oil-prices-hit-fresh-12-year-low-under-28-a-barrel-2016-01-20) for the February contract, which expires at the end of trade Wednesday. Crude for March delivery fell 2.4% to $28.85.

The losses weighed on U.S. oil companies, with shares of Chevron Corp. (CVX) down 4.4%, Exxon Mobil Corp. (XOM) off 2.6%, and Anadarko Petroleum Corp. (APC) 5.2% lower. Seadrill Ltd. (SDRL.OS) slid 15.7%.

Other movers and shakers: U.S.-listed shares of Royal Dutch Shell PLC (RDSB.LN) dropped 6% after the oil giant forecast fourth-quarter profit fell as much as 50% (http://www.marketwatch.com/story/shell-profit-falls-up-to-50-as-oil-prices-slump-2016-01-20).

Shares of International Business Machines Corp. (IBM)

Netflix Inc. (NFLX) rose 3.7% ahead of the open, after the media-streaming company late Tuesday released earnings that beat expectations (http://www.marketwatch.com/story/netflix-shares-up-on-earnings-beat-company-predicts-modest-q1-2016-01-19).

Shares of Goldman Sachs Group Inc. (GS) inched higher by 0.4% after the Wall Street bank reported a sharp slide in fourth-quarter profit (http://www.marketwatch.com/story/goldman-sachs-profit-hurt-by-massive-settlement-2016-01-20). Earnings were dented by the bank's agreement last week to pay the largest regulatory penalty (http://www.marketwatch.com/story/goldman-sachs-to-pay-record-5-billion-penalty-over-sale-of-mortgage-bonds-2016-01-15) in its history over the sale of mortgage bonds.

Restaurant operator Brinker International Inc. (EAT) fell 1.6% after its second-quarter revenue missed expectations (http://www.marketwatch.com/story/brinker-international-second-quarter-revenue-misses-reaffirms-2016-guidance-2016-01-20).

Energy-infrastructure company Kinder Morgan Inc. (KMI) reports earnings after the market closes.

Other markets: The dollar traded higher against other major currencies and flirted with an all-time high against the ruble . The buck also rose to a 13-year high against the Canadian dollar, (http://www.marketwatch.com/story/the-canadian-dollar-is-getting-crushed-2016-01-12) dragged down by falling energy prices.

Read: Wednesday is make-or-break day for Brazil's currency (http://www.marketwatch.com/story/wednesday-is-a-make-or-break-day-for-brazils-currency-2016-01-19)

Most metals declined, but gold rose 1.2% as the financial market volatility spooked investors into perceived as havens. Treasury yields plunged as demand for U.S. government debt surged.

 

(END) Dow Jones Newswires

January 20, 2016 10:28 ET (15:28 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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