NEW YORK -- Another plunge in the price of crude oil sent stocks sharply lower on Wednesday. Energy companies led the way lower with a drop of 4 percent. U.S. stocks reached their lowest level in more than a year, continuing the worst start of a year in history. The Dow Jones industrial average sank more than 400 points.
The price of crude oil sank another 5 percent, and investors worry that the global glut in crude will cause deep damage to oil and gas companies and lead to more bankruptcies and layoffs.
Overseas markets fared no better. Japan's Nikkei index entered a bear market, down 20 percent from its peak in June, and European benchmarks were down between 3 and 4 percent.
Gold and U.S. government bonds, traditional safe havens, rose in value as investors shifted money out of stocks.
KEEPING SCORE: The Dow Jones industrial average lost 430 points, or 2.7 percent, to 15,586 as of 11:08 a.m. Eastern time. The Standard & Poor's 500 index fell 55 points, or 2.9 percent, to 1,826. That is its lowest level since October 2014.
The Nasdaq composite index sank 141 points, or 3.1 percent, to 4,336. The Dow and S&P are down 10 percent so far in January; the Nasdaq is down 13 percent.
OIL DOWN AGAIN: Oil prices had already fallen to 12-year lows this week, and the price of U.S. crude has dropped more than 20 percent this year. On Wednesday benchmark U.S. crude gave up $1.43, or 5 percent, to $27.03 a barrel in New York. Brent crude, a benchmark for international oils, lost $1.02, or 3.5 percent, to $27.4 a barrel in London. Heating oil prices also sank.
ENERGY KEEPS FALLING: Energy stocks were pelted. Devon Energy lost $2.70, or 11.5 percent, to $20.78 and Murphy Oil fell $1.89, or 11.5 percent, to $14.49. Chevron sank $4.84, or 6 percent, to $76.70, the biggest loss in the Dow average.
BIG BLUES: Commercial tech giant IBM said its revenue fell for the 15th consecutive quarter. Sales fell about $170 million short of Wall Street forecasts. The stock shed $5.39, or 4.2 percent, to $122.72.
HOUSING SLUMP: Homebuilders fell after the Commerce Department said housing starts decreased in December. Still, residential construction ended 2015 at its healthiest level in eight years. Beazer Homes sank $1.13, or 13.2 percent, to $7.49 and KB Home fell 67 cents, or 6.8 percent, to $9.20.
IMF OUTLOOK: The International Monetary Fund cut its forecast for this year's global economic growth to 3.4 percent from its October outlook of 3.6 percent. The IMF downgraded the outlook for developing economies to 4.3 percent growth from 4.5 percent in October.
SPIRIT RISES: Spirit Airlines said its profit margins will be stronger than expected and costs for aircraft rent, maintenance and other items will be smaller. Its shares gained $1.28, or 3.4 percent, to $39.18. The plunge in energy prices has also helped airlines save money on jet fuel.
PUMPED UP: Nutritional supplement retailer GNC Holdings said its adjusted profit for 2015 will be at the high end of its previous estimates. Its stock rose $1.22, or 5.2 percent, to $24.78.
ZAFGEN SURGES: Drug developer Zafgen climbed after the company said its most advanced experimental drug succeeded in a late-stage clinical trial. The trial evaluated beloranib as a treatment for a rare genetic disorder that causes life-threatening obesity. Its stock jumped $4.42, or 78.6 percent, to $10.04.
BONDS: U.S. government bond prices rose as traders shifted money into lower-risk investments. The yield on the 10-year Treasury note dropped to 1.96 percent, its lowest level since last April, from 2.06 percent a day earlier. That yield, which is a benchmark for setting interest rates on home mortgages and other kinds of loans, has fallen sharply since the beginning of the year. At the end of 2015 it stood at 2.30 percent.
OVERSEAS: Japan's Nikkei fell 3.7 percent and is down more than 20 percent from its June peak. Hong Kong's Hang Seng retreated 3.8 percent. The Shanghai Composite Index lost 1 percent. In Europe, Germany's DAX tumbled 2.8 percent and France's CAC-40 shed 3.4 percent. Britain's FTSE 100 sank 3.1 percent.
CURRENCIES: The dollar fell to 116.38 yen from 117.44 yen late Tuesday. The euro fell to $1.0907 from $1.0923.