U.S. stocks suffered big losses Wednesday, as rising geopolitical tensions and sinking oil prices weighed on investor sentiment.
The Dow Jones Industrial Average slumped 252.15 points, or 1.47 percent, to 16,906.51. The S&P 500 dropped 26.45 points, or 1.31 percent, to 1,990.26. The Nasdaq Composite Index lost 55.67 points, or 1.14 percent, to 4,835.77. Wall Street was nervous after the Democratic People's Republic of Korea (DPRK) announced it successfully carried out its first hydrogen bomb test Wednesday.
Over the weekend, Saudi Arabia cut off diplomatic ties with Iran after angry protesters stormed its embassy in Tehran, the capital of Iran, to protest against Saudi's execution of prominent Shiite cleric Sheikh Nimr Baqir al-Nimr. Analysts said the heightened geopolitical tensions sent traders scurrying from stocks into safe haven assets. Also, oil prices hit their lowest level in more than 11 years Wednesday as U.S. crude output of last week increased unexpectedly, which in turn dampened market sentiment.
Dragged by plummeting oil prices, the energy sector, the biggest laggard among the S&P 500's ten sectors, slumped 3.62 percent Wednesday. On the economic front, according to the minutes from Federal Reserve's December meeting, the central bank decided to raise rates for the first time in nearly a decade, though some officials expressed concerns about lingering low inflation and the stifling effects on the U.S. economy of a strong U.S. dollar and slow growth overseas.
Fed members expected economic conditions would evolve in a manner that would warrant only gradual increases in the federal funds rate, said the minutes. Meanwhile, U.S. private companies added 257,000 jobs in December, up from 211,000 jobs in November, said the National Employment Report released jointly by Automatic Data Processing (ADP) and Moody's Analytics Wednesday.
The latest ADP figure is the best monthly performance in 2015. The goods and services deficit was 42.4 billion U.S. dollars in November, down 2.2 billion dollars from the revised level of 44.6 billion dollars in October, the U.S. Commerce Department reported Wednesday.
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