STOCKS have incurred their biggest weekly loss since 2011 as investors reappraised the implications of the oil bust for the global economy. The losses are likely to mount this week unless the Federal Reserve retreats from hints that it's ready to shift into rate-hiking mode.

A report from the US Commerce Department on November sales confirmed hopes that the plunge in the price of petrol would benefit carmakers and retailers as consumers found extra spending money in their pockets. But fears also grew that the oil bust in the US and overseas will turn out like the 2008 US housing slump. Once again, the collapse of one cornerstone of the economy could destabilise other sectors or even trigger another financial crisis.

"Markets are recognising that the drop in oil prices, although good for consumers and consumer spending, is overall somewhat of a mixed bag for the US economy and potentially problematic," said Oliver Pursche, president of money manager Gary Goldberg Financial Services.