As Wall Street prepares to close out 2015 much where it started, investors looked to the year ahead to determine direction on the second-last day of trading.
And the forecasts point to similar factors that stymied equities this year: middling global economic growth and the potential for more bouts of volatility.
Take it from International Monetary Fund Managing Director Christine Lagarde who warned global growth in 2016 will likely be constrained. Lagarde pointed to higher interest rates in the U.S. and a weaker Chinese economy as likely headwinds to global growth next year in comments to a German newspaper.
Fears over what next year might hold pulled crude prices and equities lower on Wednesday. The S&P 500 (SPY) fell 0.6%, the Dow Jones Industrial Average (DIA) dropped 0.51%, and the Nasdaq (QQQ) slid 0.67%. The S&P 500 is up 0.35% for the year.
Crude oil extended its decline after weekly data from the Energy Information Administration showed an unexpected increase of 2.6 million barrels in crude stocks in the past week. Analysts had expected a decline in inventories. West Texas Intermediate crude oil prices fell 3.4% to $36.60 a barrel.
The energy sector was the worst performer in the markets Wednesday. Exxon Mobil (XOM) , Kinder Morgan (KMI) , Chevron (CVX) and Schlumberger (SLB) were all lower, while the Energy Select Sector SPDR ETF (XLE) fell 1.2%.
However, Lagarde did concede that higher U.S. interest rates were "necessary and healthy." Outside of the energy sector, recent data has supported the picture of an improving U.S. economy with little to no signs of slowing down.
"As the [Federal Reserve] raises rates at a turtle speed in 2016 ... instead of focusing intensely on minor tail risks more investors will come around to the view that the economy is moving closer and closer to full capacity and that is why the Fed needs to push rates higher," Torsten Sløk, chief international economist at Deutsche Bank, wrote in a note.
Icahn Enterprises (IEP) and Pep Boys (PBY) have formally announced a $1.031 billion merger after much back and forth. Activist investor Carl Icahn's firm secured the deal for $18.50 a share and expects to close in the first quarter of next year. Bridgestone had previously been in the race for the auto shop chain but declined to raise its bid.
Fairchild Semiconductor International (FCS) climbed 3% after acknowledging that it received a revised unsolicited offer worth $21.70 per share. The chipmaker said it would "carefully review and consider" the unidentified bidder's offer. ON Semiconductor (ON) had previously offered $20 a share for Fairchild.
DuPont (DD) plans to eliminate around 1,700 jobs in Delaware in the first quarter of 2016. The chemicals company, like others in the materials sector, has been squeezed by a slump in commodity prices and reduced industrial demand.
SeaWorld (SEAS) filed a lawsuit on Tuesday challenging the California Coastal Commission's decision to ban the company from breeding killer whales. The theme park operator argues that the commission acted outside its authority in its October ruling.
KaloBios Pharmaceuticals (KBIO) filed for bankruptcy protection just a week after being notified it would be delisted by the Nasdaq. The company has been under pressure since the arrest of Martin Shkreli, its CEO at the time. The biopharma company listed its assets and liabilities between $1 million and $10 million.