Shares tumble amid risk aversion; oil price, China yuan drop
By Sam Forgione
NEW YORK (Reuters) - Stock markets worldwide tumbled on Friday, Brent crude oil prices fell to seven-year lows and China's yuan currency sank on risk aversion ahead of a widely anticipated U.S. interest rate increase next week and worries over economic growth.
The benchmark U.S. S&P 500 sank nearly 2 percent, while crude prices plunged further on a persistent global oversupply. The International Energy Agency said it sees the glut worsening in 2016 as demand slows and OPEC shows no signs of slowing production as it fights for market share.
Brent crude posted its biggest weekly percentage drop in over a year, while U.S. crude posted its biggest such decline in roughly a year.
"About 10 percent of the S&P 500 is energy and commodity related, and it is a barometer for the global economy. When you see such a plunge, it worries investors," said Art Hogan, chief market strategist at Wunderlich Securities in New York.
China's yuan fell to its lowest in four and a half years on concerns over a slowdown of the world's second-biggest economy and expectations of a U.S. rate hike. Concerns grew that weakness in the yuan could weigh on the global economy.
In the spot market, the yuan CNY=CFXS hit 6.4564 against the U.S. dollar, its weakest since July 2011.
Brent crude LCOc1 settled down 4.53 percent at $37.93 a barrel after hitting $37.36, its lowest since December 2008. U.S. crude CLc1 settled down 3.10 percent at $35.62 after hitting $35.32, its lowest since February 2009.
On Wall Street, the S&P 500 posted its biggest weekly percentage drop in over three and a half months, while the other two major U.S. indexes posted their biggest weekly declines in a month. Continued...