U.S. stocks were sold off Wednesday in a sign that investors are still fretting over low oil prices and are jittery after watching markets get off to a tumultuous start this year.
The Dow Jones industrial average fell 364.81 points, or 2.2 percent, to 16,151.41. The Standard & Poor’s 500-stock index closed down 2.5 percent for the day, officially entering correction territory, which is defined as being off more than 10 percent from the most recent high. The tech-heavy Nasdaq composite index ended the day down 3.4 percent.
The Dow and the S&P 500 are down more than 7 percent this year, both having their worst eight-day start to a year.
“People need something that’s going to give them some confidence, and they haven’t really seen it so far in 2016,” said JJ Kinahan, chief strategist for TD Ameritrade.
With U.S. oil prices hovering near 12-year lows at roughly $30 a barrel, investors remained worried that low prices were sending a bad omen about the health of the global economy.
Market losses were steepest among the consumer-discretionary sector of the S&P 500, which slid by 3.4 percent as some investors cashed in to take profits. The sector, which includes retailers, hotel companies and car manufacturers, was one of the best performers in 2015.
Netflix, which was also among last year’s biggest winners, suffered some of the steepest losses Wednesday, sliding 8.6 percent.
All 10 sectors of the S&P 500 index are down for the year. But utility stocks have fallen the least, in a sign that investors are scaling back risk by turning to more-stable companies that are often favored for their dividends.
Stock markets opened the day with modest, brief gains before beginning a broad decline. Selling accelerated in the final minutes of trading as investors watching the volatility made moves to cut losses.
“Lower prices in the overall market make people nervous,” said Keith Lerner, chief market strategist for SunTrust Bank, adding that some investors may be repositioning their portfolios after watching stocks slide.
Many investors have viewed sinking oil prices as a sign that the global economy is slowing down. But those fears may be premature, said Jamie Cox, managing partner at Harris Financial Group.
Investors will know more about how the U.S. economy is handling the threat of a slowdown in China in the coming weeks as more companies begin to report earnings.
Major financial firms with international exposure, such as Citigroup and JPMorgan Chase, are among the companies reporting Thursday.
News on how those banks are faring will offer more insight on the state of global growth, Cox said.
Wednesday’s market drop was a continuation of the volatility that has rocked stocks since the beginning of the year. Some investment analysts have been lowering their outlooks and calling on clients to take a more conservative stance.
But others are saying that the selling is beginning to look overdone.
“I say the economy is getting better, not worse,” Cox said. “I think most of the volatility in the market is going to be temporary.”