U.S. stocks closed sharply lower Friday ahead of a long weekend and the onslaught of earnings season, after a slew of disappointing U.S. data, a plunge in oil to below $30 a barrel, and a sell-off in Chinese stocks added to mounting concerns about slowing global growth.
Stocks ended more than 2 percent lower, well off session lows, but the S&P 500 and Dow Jones industrial average still posted their worst two-week start to a year on record.
The S&P 500 held above its August low of 1,867 in the close. The index briefly fell 3.5 percent in midday trade to below that level, to its lowest since mid-October 2014. ( Tweet This )
"Momentarily, yes, it is encouraging and it will not be a negative anecdote for the day, but you've got some pretty good catalysts in China GDP and the fact that we're closed for the day (Monday). The sense is that this is a longer process," said Ryan Larson, head of equity trading, U.S., RBC Global Asset Management (U.S.).
U.S. stock markets are closed Monday for Martin Luther King, Jr. Day. China GDP is among the few data points from the country due out ahead of Tuesday's U.S. trading session. Friday also marked an options expiration day that likely contributed to some volatility.
"Obviously it started with growth concerns overseas and now we're (hitting) ourselves with the same growth concerns as retail sales were weak and Empire manufacturing that collapsed," said Peter Boockvar, chief market analyst at The Lindsey Group.
The Dow Jones industrial average closed about 390 points lower after earlier falling nearly 537 points. The Dow closed below the psychologically key 16,000 level for the first time since Aug. 25, with Goldman Sachs contributing the most to declines.
"I think some of that was overselling. Still, (about) 400 points is pretty serious. I think going into the close I think things could possibly get better," said Douglas Cote, chief market strategist at Voya Investment Management. He's telling investors, "stick to global diversification and don't panic."
"This seems overdone, (but) oil under $30 raises a lot of concern about the impact to not only energy but also the banks and their exposure," he said.
U.S. crude oil settled down $1.78, or 5.71 percent, at $29.42 a barrel, the first settle under $30 in 12 years. WTI lost 11.3 percent for the week, its worst in more than a year.