Adam Shell, and Jane Onyanga-Omara

USA TODAY

The market storm that has engulfed Wall Street to start 2016 again took aim at stock investors, with the Dow closing down nearly 400 points Friday, as increasingly jittery traders reacted to the latest swoon in oil prices and another big selloff in Chinese stocks.

The massive selloff extended the U.S. stock market's worst start to a year ever to 10 trading sessions. The slide is gaining steam amid raising investor fears of slowing global growth and even steeper losses in markets.

"Today hasn't been an easy one in the markets for the faint of heart," Terry Sandven, chief equity strategist for U.S. Bank Wealth Management, said.

At the closing bell, the Dow Jones industrial average, which at one point was down nearly 537 points, was off 391 points, or 2.4%, to 15,988.08, and back to levels last seen in August.

The Standard & Poor's 500 index dropped 2.2% to 1880.20, after earlier falling below its August low of 1867.61, a key level Wall Street is watching and hopes will hold as it marked the bottom on the last correction. The Nasdaq composite index stumbled 2.7%. The S&P 500 is now down 8% in 2016 and the Nasdaq is off 10.4%.

The Dow:

► Finished the week down 2.2%

► Is down 8.25% for 2016

► Is 12.69% off its all-time high of May 2015

In a replay of other big down days so far in the new year, Thursday's rebound on Wall Street turned out to be short-lived and heavy selling resumed Friday. Sparking the latest selloff was a 5%-plus slide in U.S.-produced crude that sent prices back down below the key $30 a barrel level. Adding to investor angst was another big stock market slide in mainland China, where the Shanghai composite slid 3.6%, putting it back in bear market territory, or more than 20% from its recent high.

"The market has been dropping because of concerns about global growth," says Alan Skrainka, chief investment officer at Cornerstone Wealth Management. "The U.S. and China have been the two biggest engines pulling the world economy forward. Currently, investors are worried that one of those engines (China) has lost a lot of its momentum."

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The latest sell-off is a sign that many investors, spooked by the ongoing bloodletting on Wall Street, are throwing in the towel and reducing their positions in stocks to pare risk.

"It does feel a bit like capitulation before a near-term bottom right now," Barry Bannister, chief equity strategist at Stifel, told USA TODAY.

The fact that Wall Street is closed Monday for Martin Luther King Jr. Day, was also cited as a reason for the heavy selling, as investors did not want to hold stocks over the long weekend, some Wall Street pros say.

A top Wall Street executive warned that stocks could slide another 10% before ending the year up higher.

BlackRock CEO and Chairman Laurence Fink in a Friday appearance on CNBC's "Squawk Box" characterized the current financial conditions as "a real market decline, bordering on a bear market."

"But the speed at which this is happening is just a reassessment of the risk, reassessment of where we're going," added Fink. He predicted another 10% decline in stocks, with oil touching $25 a barrel.

"I actually believe there's not enough blood in the street, we'll probably have to test the markets lower," said Fink. However, such a fall would poise markets for a "buying opportunity," he added.

Weak U.S. economic data didn't help matters. December retail sales dipped 0.1% in December. Manufacturing in the New York region came in much weaker-than-expected in January and industrial production for December also fell short of estimates. The weak data points prompted at least two Wall Street firms to reduce their fourth-quarter GDP growth projections. Barclays now sees growth at 0.4% in the final quarter of 2015 and UBS cut its estimates to 0.8% from 1.2%.

Stifel's Bannister lays out what's spooking investors: "What most investors fear is deflation, a fall in the general price level," he says. "The two greatest catalysts for deflation have been China devaluing its currency and the Fed potentially going too fast hiking rates."

If there's good news, he says, it is that those deflation concerns "may dissipate if China continues to move to stabilize their currency as they have done pretty decisively in recent days," and if the Fed reduces the number of planned interest rate hikes this year. Bannister sees the Fed hiking rates just a half of a percentage point in 2016, and not the full-point it has forecast. "That would bring the Fed more in-line with market sentiment, which is positive for stocks," he says.

Oil fell to under $30 a barrel Friday for the second time in a week, but stayed there this time and closed below that threshold, marking new 12-year lows for both U.S. and Brent crude, Reuters said.

The Shanghai composite index sank 3.55% to finish at 2,900.97, its lowest close since Dec. 8, 2014, as renewed concerns about China's economy led global stocks lower.

The Shanghai composite index has dropped more than 20% from its high in December, officially entering bear market territory.

China’s official Xinhua News Agency reported that banks’ new yuan loans during the last month fell over a year earlier, in a sign that momentum for the credit that fuels economic growth was slowing.

Japan’s Nikkei 225 index lost 0.5% to close at 17,147.11 while Hong Kong’s Hang Seng index dropped 1.5% to 19,520.77.

European shares were lower Friday. Germany's DAX lost 2.5%, France's CAC 40 was 2.4% lower and Britain's FTSE 100 was down 1.9%.

Contributing: Kevin McCoy, Associated Press

Adam Shell on Twitter: @adamshell.