U.S. stocks tumbled on Friday as a continued decline in energy prices stoked inflation worries and Chinese and commodity markets extended their weekly decline.
The S&P 500 was down 2.4%, the Dow Jones Industrial Average fell 2.4%, and the Nasdaq tumbled 3.2%. The Dow was on track for its worst month since February 2009, while the tech-heavy Nasdaq was on track for its worst monthly performance since January 2008. The Volatility Index, otherwise known as the "fear index," jumped 16.3% to 27.82.
U.S. producer prices fell in December, the third straight month in decline, as tumbling energy prices continued to pressure inflation. The producer price index decreased 0.1% over the month, contributing to a 1% drop in the past 12 months. Excluding volatile items such as food and energy prices, core prices rose 0.2%.
Meanwhile, retail sales in the U.S. fell 0.1% in December, dragged down by a decline in gas prices. Excluding gas, retail sales were flat.
Business activity in the New York region fell to its worst level since the recession. The Empire State Factory Index fell to negative 19.4 in January from 6.2 in December. The reading is its lowest since April 2009.
Industrial production also came in below estimates, falling 0.4% in December, double the fall economists had expected. The measure had dropped 0.9% in November.
Consumer confidence bucked the trend of poor data this morning to rise in January, according to the latest reading from the University of Michigan. Sentiment climbed to 93.3 from 92.6 in the preliminary reading, its fourth straight monthly increase. Confidence was boosted by better expectations over the future of the economy.
China's Shanghai Composite fell 3.6% on Friday, entering bear market territory having fallen more than 20% from its recent high reached on Dec. 22. Renewed fears were tied to reports that Chinese banks would no longer take stocks as collateral for loans, though these reports have yet to be substantiated.
Renewed fears over the Chinese economy triggered a selloff in crude oil prices. Concerns over Iranian oil flooding the market added to downward pressure after a Reuters report said the country is on track to ship 1.1 million barrels a day this month, up 20% from December.
West Texas Intermediate crude oil fell 5% to $29.64 a barrel, a fresh 12-year low. Commodities have been in selloff mode since the beginning of the year on oversupply concerns and demand worries.
New York Federal Reserve President William Dudley contributed to uneasiness on Friday after talk of the Fed's rate hike plan surfaced. Dudley said while recent data has been "on the softer side" he expects economic growth at a pace above the long-term trend. His comments suggested the Fed could still be on track for four rate hikes this year after initiating its first in nearly a decade last month.
Wal-Mart (WMT) announced plans to close 269 stores globally, including all 102 of its smaller-format Walmart Express stores. The closures will affect around 16,000 employees, including 10,000 in the U.S.
Citigroup (C) fell 2% despite edging past quarterly estimates. The bank earned $1.06 a share in adjusted profit, boosted by lower legal fees, a penny above forecasts. Quarterly revenue of $18.5 billion came in above expectations of $17.9 billion.
Wells Fargo (WFC) slid 1.5% after disappointing quarterly revenue weighed on shares. The bank generated $21.6 billion in revenue, up 1% from a year earlier but below estimates of $21.84 billion. Quarterly profit of $1.03 a share came in a penny above expectations.
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Intel (INTC) shares fell 6% despite a better-than-expected quarter. The tech company earned 74 cents a share, above forecasts of 63 cents, while revenue of $14.9 billion edged out expectations by $100 million.
Goldman Sachs (GS) announced that it will take a $1.5 billion hit in its fourth quarter tied to the settlement of a mortgage-bond case. The investigation had been related to its "securitization, underwriting and sale of residential mortgage-backed securities" around a decade ago.
BlackRock (BLK) reported a jump in quarterly profit on higher inflows, boosted by market volatility toward the end of last year. The money manager earned $861 million, up from $813 million in the year-ago quarter.
General Electric (GE) has agreed to sell its appliance unit to Chinese appliance maker Haier for $5.4 billion. The sale is the latest in GE's moves to strip away parts of its business to focus on its traditional industrial activities.
BHP Billiton (BHP) tumbled 7% after announcing it will take a $7.2 billion write-down on its U.S. shale oil and gas assets. The oil and mining company said the sharp fall in commodity prices had made the write-down necessary.