NEW YORK -- Global markets staged a wild ride on Wednesday amid fears of cratering oil prices and slowing international growth, extending a turbulent streak that has wiped out more than $2 trillion this year in value from American companies.
Investors were unnerved by doubts over China's weakening economy and U.S. oil prices that have plummeted nearly 30 percent since the year began, sending the Dow Jones industrial average plunging early Wednesday more than 500 points.
But the panicked sell-off turned to rally in the afternoon, as the 30-company Dow recovered to about 15,766, a loss of about 1 percent. The Standard & Poor's 500 index, a broader look at the market, slipped 1 percent, and the tech-heavy Nasdaq Composite turned heavy losses into a comeback, posting a gain of less than 1 percent.
U.S. oil prices plunged more than 6 percent Wednesday to about $26 a barrel, their lowest level since 2003, after having plummeted nearly 30 percent since the year began. Investors say a weakening global demand for oil, so vital to construction and manufacturing, could point to a broader underlying danger of slowing global growth.
Never miss a local story.
The worldwide rout extended a devastating trading streak that has marked the worst start to a year in market history, with the three
major U.S. indices falling more than 10 percent in the past three weeks. American companies this year already have lost more than $2 trillion in market wealth.
The panicked sell-off touched every corner of American industry, most notably energy, raw materials, finance and retail. All 500 companies in the S&P index hit yearly lows.
Even companies posting encouraging results have been hit. Streaming giant Netflix, which told Wall Street on Tuesday that its earnings and international subscriber base had grown more than expected, nevertheless saw its shares fall Wednesday more than 6 percent before rallying to slight gains.
Turbulence for tech giants
Other technology giants saw similar turbulence. Facebook stock fell more than 5 percent before recovering slightly by midday, when it was down about 2 percent. Apple shares fell about 3 percent during the day to hit their lowest level since the summer of 2014 before buoying back to a 1 percent loss.
Economists pushed to cool down the heated sell-off by pointing to more optimistic fundamentals, including the nation's strengthening employment rate and the industry boost of cheaper fuel costs.
"The sell-off is simply happening too fast, which signals panic selling more than reasoned investment decisions. ... It can't last," Chris Rupkey, chief financial analyst at MUFG Union Bank, told investors. "This is overdone, and overdone, hard-down market sell-offs don't hold."
Other investment managers sought to calm traders unnerved by heavy volatility following several years of market strength after the global financial crisis.
Although he acknowledged that many had "fears of a full-scale recession," Chris Hyzy, a chief investment officer at Bank of America Merrill Lynch, wrote Wednesday in a note to investors that "the 80 month-long economic expansion is still alive."
An increasingly sluggish China has touched off fears of a hard landing for the world's second-largest economy, which could ripple outward and harm the many companies that rely on its exports and spending for business.
The International Monetary Fund on Tuesday trimmed its projections for global growth for the third time in less than a year, pointing to a recent Beijing report that showed China's economy grew in 2015 at its slowest rate in more than two decades.
Lower oil prices expected
The International Energy Agency, a global oil adviser, said Tuesday that crude oil prices would continue to sink this year if suppliers in countries such as Iran keep pumping, creating a glut that could force the oil market to "drown in oversupply."
Slumping energy prices have helped lower the cost of living in the United States, with December posting the smallest yearly increase in the Consumer Price Index in seven years, the Labor Department said Wednesday.
Tuesday's trading began hopeful but soured by the U.S. closing bell, leaving indexes such as the Dow with only slight gains.
Investors flocked to the relative safe havens of gold and government bonds, with yields on 10-year U.S. Treasury notes falling just below 2 percent Wednesday. The yields fall as prices rise.
The sell-off has cast a dark cloud over the U.S. economy, particularly after the Federal Reserve acted late last year to raise short-term interest rates for the first time in nearly a decade.
The labor market has strengthened, adding an average of 284,000 jobs over the past three months, but industrial production and consumer spending both fell last month.
Global markets took a beating Wednesday. Europe's Stoxx 600 index tumbled more than 3 percent, while shares in Hong Kong dove sharply to three-year lows.
Japan's Nikkei Stock Average slid more than 3 percent and entered what analysts call a bear market, having collapsed 20 percent from recent highs.