On Thursday, it was triggered within half an hour of trading, giving China’s stock markets their shortest trading day in 25 years.
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Investors are nervous after the Chinese central bank moved to weaken the the country’s currency, the yuan, for the eighth day running, sparking fears of a currency war. Trading was automatically suspended as a result. European stocks and a key dollar index advanced (http://www.marketwatch.com/story/yen-slips-against-dollar-as-china-markets-find-stability-2016-01-08), while gold futures dropped, though the safety play stayed on track for a weekly gain of about 3.5%.
The Standard & Poor’s 500 index rose 11 points, or 0.6 percent, to 1,953. China allows the biggest fall in the yuan in five months, and Shanghai stocks are halted for the second time after another brutal selloff tripped a newly-imposed circuit breaker. Chinese stocks nose dived on Thursday, triggering the second daylong trading halt of the week and sending share markets, …
Crude ol was also breaking to new lows on Thursday with West Texas Intermediate crude oil falling another 4% to trade as low as $32.60, breaking absolute low of $32.80 hit during the financial crisis to mark a 14-year low for the commodity.
Industrial stocks fell, and aerospace company Boeing lost $3.31, or 2.4 percent, to $135.52 and railroad operator Union Pacific shed 76 cents, or 1 percent, to $74.07.
Thursday’s drop pushed the tech-heavy Nasdaq composite index into what market watchers call a “correction”, or a drop of 10 percent from a recent peak. About 8.9 billion shares changed hands on US exchanges, well above the 7.3 billion daily average for the past 20 trading days, according to Thomson Reuters data.
Compounding fears over the strength of China’s economy, an ongoing row between Iran and Saudi Arabia has the potential to further destabilize an already shaky Middle East, and North Korea’s testing of a nuclear weapon earlier this week have bogged down investor confidence.
Investors have been jittery as markets got off to their worst four-day start to a year and economists slashed fourth-quarter USA growth estimates. (NYSE:WMT) was the sole Dow component in the green by session’s end, adding 2.3%. However the price of copper declined 6.6 cents, or 3.2 percent, to $2.022 a pound.
Investors also braced for today’s USA government jobs report, which could show how well-insulated the U.S. economy is from worldwide stresses. Global tensions, plunging oil prices and a deteriorating junk bond market are all contributing factors causing market tremors.
Other global markets also fell.
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Benchmark U.S. crude fell 28 cents to close at $36.76 a barrel on the New York Mercantile Exchange.
