It;s not been a good month for your 401(k) so far. The markets are now in bear territory and have given back all their 2015 gains and then some. Oil is now sinking under $30 and barrel and people are starting to ask uncomfortable questions about that Fed rate hike.
Wall Street bled on Friday, with the S&P 500 sinking to its lowest since October 2014 as oil prices sank below $30 per barrel and fears grew about economic trouble in China.
Pain was dealt widely, with the day's trading volume unusually high and more than a fifth of S&P 500 stocks touching 52-week lows. The major S&P sectors all ended sharply lower. The Russell 2000 small-cap index dropped as much as 3.5 percent to its lowest since July 2013.
The energy sector dropped 2.87 percent as oil prices fell 6.5 percent, in part due to fears of slow economic growth in China, where major stock indexes also slumped overnight. The energy sector has lost nearly half its value after hitting record highs in late 2014.
"Initially when oil was down, the convenient line was 'Well, it's good for the other nine sectors'," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. "That tune has changed. Now, it's a contagion to the other nine sectors. It's a contagion to Main Street and Wall Street."
The technology sector was the day's biggest loser, sliding 3.15 percent as weak quarterly results from chipmaker Intel weighed heavily on chip stocks.
The S&P 500 has fallen about 12 percent from its high in May, pushing it into what is generally considered "correction territory."
Hopefully things will start to turn around here, unlike 2007/2008 we're not losing 800,000 jobs a month and not having economies collapse. But even a mild recession at this point would be hideous news for the Dems, so I'm really hoping that this is a hiccup as it was in August.