DVN Devon Energy Corp

By Ellie Ismailidou and Sara Sjolin, MarketWatch

CPI, housing-starts data offer mixed picture of U.S. economy

U.S. stocks amassed losses Wednesday, with the Dow industrials plummeting over 400 points, as a renewed rout in oil prices and global equities triggered a selloff on Wall Street.

The S&P 500 dropped 66 points, or 3.6%, to 1,814, falling well below its Aug. 25 closing low of 1867.61 and below its intraday low of 1,821 set on October 15, 2014 -- both levels viewed as key technical support point for the index, suggesting further moves lower may be ahead. The index fell the farthest below its 200-day moving (http://www.marketwatch.com/story/sp-500-drops-more-than-10-below-its-200-day-moving-average-2016-01-20), since the October 2011 correction, according to data provided by FactSet.

The energy sector was the worst performer on the S&P 500, down 5.4% on the day and 15.6% since the beginning of the year, led by Devon Energy Corp. (DVN), down 12.3% on the day.

The Dow Jones Industrial Average dropped 474 points, or 3%, to 15,54 and the Nasdaq Composite was off 145 points, or 3.3%, at 4,330.

The stock-market rout came as equities racked up sharp losses world-wide, fueled by oil falling below $28 (http://www.marketwatch.com/story/oil-prices-hit-fresh-12-year-low-under-28-a-barrel-2016-01-20) a barrel and worries over an economic slowdown in China and other developing markets.

"The fledgling hope from yesterday that markets were on the turn has been quashed by sharp overnight falls in Japan and Asia," said Rebecca O'Keeffe, head of investment at stockbroker Interactive Investor, in a note.

"With every upturn being followed by deeper falls, investors are increasingly wary as it becomes more and more difficult to determine what might happen next," O'Keeffe said.

What is more concerning is that "even as investors are turning their focus to U.S. domestic fundamentals, we still don't see equity support in terms of buying," said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

Including Wednesday morning, out of 46 issues on the S&P 500 that have reported earnings, 35 beat expectations, with 11 of 14 financials beating, according to data from S&P Dow Jones Indices. Yet aggregate earnings per share for the S&P 500 were estimated to drop nearly 6% year-over-year, according to data from S&P Capital IQ.

"Earnings will be the main issue that will make or break the market... By this time next week we will be so deep into the earnings [season] that you can't miss it," Silverblatt added.

Meanwhile, a flurry of economic data offered a mixed picture of the U.S. economy, but did little to hearten the gloomy sentiment hurting the market.

The U.S. consumer-price index dropped 0.1% in December, (http://www.marketwatch.com/story/inflation-falls-again-in-december-cpi-finds-2016-01-20) but core CPI, which excludes food and energy, rose 0.1%. Though the headline number came in lower than expected, the core was in line with economists' expectations. For all of 2015 inflation rose just 0.7%, the second slowest rate in 50 years.

Housing starts fell 2.5% last month (http://www.marketwatch.com/story/housing-starts-fall-25-in-final-month-of-2015-2016-01-20), missing economists' expectations, and indicating that home builders cut back slightly on new construction in the final month of 2015.

Meanwhile, in Asia (http://www.marketwatch.com/story/hong-kong-stocks-hit-312-year-low-japan-nears-bear-market-2016-01-19), Japan's Nikkei slid into bear market territory, which marks a 20% slump from a recent high. And in Europe, markets were hit across the board, with the Stoxx Europe 600 index tumbling over 3% to close at its lowest level since late 2014 (http://www.marketwatch.com/story/european-stocks-tumbling-toward-lowest-close-in-more-than-a-year-2016-01-20).

Read:China's problems now spilling into Hong Kong (http://www.marketwatch.com/story/have-investors-lost-faith-in-hong-kong-as-well-as-in-china-2016-01-19)

Oil blues: Crude oil hit fresh 12-year lows to trade below $28 a barrel (http://www.marketwatch.com/story/oil-prices-hit-fresh-12-year-low-under-28-a-barrel-2016-01-20) for the February contract, which expires at the end of trade Wednesday. Crude for March delivery fell 2.4% to $28.85.

The losses weighed on U.S. oil companies, with shares of Chevron Corp. (CVX) down 4.4%, Exxon Mobil Corp. (XOM) off 2.6%, and Anadarko Petroleum Corp. (APC) 5.2% lower. Seadrill Ltd. (SDRL.OS) slid 15.7%.

Other movers and shakers: International Business Machines Corp. shares (IBM), retreated 4.6% after the company late Tuesday reported a drop in fourth-quarter earnings (http://www.marketwatch.com/story/ibm-profit-falls-on-lower-revenue-2016-01-19-164854141).

Read:IBM needs software to save it from prolonged downfall (http://www.marketwatch.com/story/ibm-needs-software-to-save-it-from-prolonged-downfall-2016-01-19)

U.S.-listed shares of Royal Dutch Shell PLC (RDSB.LN) dropped 5.4% after the oil giant forecast fourth-quarter profit fell as much as 50% (http://www.marketwatch.com/story/shell-profit-falls-up-to-50-as-oil-prices-slump-2016-01-20).

Netflix Inc. (NFLX) reversed premarket gains to drop 5.9% Wednesday afternoon, after the media-streaming company late Tuesday released earnings that beat expectations (http://www.marketwatch.com/story/netflix-shares-up-on-earnings-beat-company-predicts-modest-q1-2016-01-19).

Shares of Goldman Sachs Group Inc. (GS) slid 2.5% after the Wall Street bank reported a sharp slide in fourth-quarter profit (http://www.marketwatch.com/story/goldman-sachs-profit-hurt-by-massive-settlement-2016-01-20). Earnings were dented by the bank's agreement last week to pay the largest regulatory penalty (http://www.marketwatch.com/story/goldman-sachs-to-pay-record-5-billion-penalty-over-sale-of-mortgage-bonds-2016-01-15) in its history over the sale of mortgage bonds.

Restaurant operator Brinker International Inc. (EAT) fell 4.8% after its second-quarter revenue missed expectations (http://www.marketwatch.com/story/brinker-international-second-quarter-revenue-misses-reaffirms-2016-guidance-2016-01-20).

Energy-infrastructure company Kinder Morgan Inc. (KMI) reports earnings after the market closes.

Other markets: The dollar traded higher against other major currencies and flirted with an all-time high against the ruble . The buck also rose to a 13-year high against the Canadian dollar, (http://www.marketwatch.com/story/the-canadian-dollar-is-getting-crushed-2016-01-12) dragged down by falling energy prices.

Read: Wednesday is make-or-break day for Brazil's currency (http://www.marketwatch.com/story/wednesday-is-a-make-or-break-day-for-brazils-currency-2016-01-19)

Most metals declined, but gold rose 1.2% as the financial market volatility spooked investors into perceived as havens. Treasury yields plunged as demand for U.S. government debt surged. (http://www.marketwatch.com/story/treasury-yields-fall-as-investors-flee-to-safety-2016-01-20)

(END) Dow Jones Newswires

January 20, 2016 12:58 ET (17:58 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.