U.S. stocks remained sharply lower Friday afternoon after crude oil prices closed their worst week of the year.
The S&P 500 was down 1.7%, the Dow Jones Industrial Average slid 1.6%, and the Nasdaq fell 1.9%.
Crude oil prices dipped below $36 a barrel on Friday on concerns demand for the commodity would fall next year. The International Energy Agency warned the "first signs of a slowdown" in global oil demand were seen in the current quarter in the face of an "unrelenting" oversupply of crude.
Oil closed down 11% for the entire week, its worst weekly performance of 2015. West Texas Intermediate crude oil on Friday fell 3.1% to $35.62 a barrel.
"Crude oil prices have taken another step lower to levels not seen since December 2008," said Timothy Evans, energy futures specialist at Citi. "Equity market weakness including a 1.9% drop on the FTSE and a 1% decline in the S&P 500 helped confirm that this was a relatively serious price development."
In a positive development for oil, active U.S. oil rigs declined for their fourth straight week. The total number of active rigs dropped this week by 28 to 709, according to Baker Hughes data.
The energy sector was the worst performer on markets. Chevron (CVX - Get Report) , Exxon Mobil (XOM - Get Report) , Kinder Morgan (KMI - Get Report) and ConocoPhillips (COP - Get Report) were sharply lower, while the Energy Select Sector SPDR ETF (XLE - Get Report) fell 3.2%.
Retail sales increased 0.2% in November, slightly lower than an expected 0.3% increase. Excluding auto sales, retail sales climbed 0.4%. Economists had already expected weakness, particularly in winter clothing sales due to unseasonably warm weather in the U.S.
"In the months ahead, we expect consumers keep spending the extra income gained from the healthy job market and the continued decline in energy prices," Kevin Cummins, U.S. economist at RBS Securities, wrote in a note.
Producer prices climbed 0.3% in November, according to the Bureau of Labor Statistics. Excluding volatile items such as food and energy prices, producer prices climbed 0.1%. The measure fell 1.1% over the past 12 months, primarily a result of slumping energy costs, while core prices increased 0.3%.
Dow Chemical (DOW) and DuPont (DD - Get Report) officially announced Friday they would merge. The new chemicals company will be called DowDuPont until splitting into three separate publicly traded companies around 18 months to two years after the merger is finalized. The companies expect to reap $3 billion in synergies over the next two years. Dow fell 3.8%, DuPont shares declined 5.6%.
Alibaba (BABA - Get Report) fell more than 1% after announcing that it will acquire South China Morning Post, a Hong Kong-based, English-language newspaper. The play is suspected to be a move to influence Western media that has traditionally been harsh on China's government.
JetBlue (JBLU - Get Report) slid 3% after guiding for a disappointing fourth quarter. The airline expects passenger revenue per available seat mile to decrease 2% to 3% because of holiday timing this year.
Ford (F - Get Report) shares fell 0.8% after the company announced it will invest another $4.5 billion into electric vehicles by 2020. The automaker expects more than 40% of its models to be electrified by that deadline.
Restoration Hardware (RH - Get Report) shares fell 1% despite earnings jumping 37% from a year earlier. The home restoration retailer earned 65 cents in its third quarter, 2 cents above estimates. The company also increased the low-end of full-year guidance.
Adobe (ADBE - Get Report) rose after reporting a double-digit percentage increase in sales in its fourth quarter. The software developer earned 62 cents a share, 2 cents above forecasts, while revenue surged 22.4%. Adobe saw strong subscriber growth for its Creative Cloud products line.
Finisar (FNSR - Get Report) moved sharply higher after beating quarterly estimates. The networking tech developer said it had seen strong demand for Ethernet transceivers among other products offered to telecom clients.