U.S. stocks are paring their losses in midday trading after opening sharply lower on the back of big losses for China’s stock market.
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After an unprecedented 1,000-point decline at the open on Monday, the Dow closed with a loss of almost 600 points. A wave of selling has circled the globe after the historic plunge in Chinese stocks.
The current sell-off has triggered worries in corporate boardrooms, in government capitals and among ordinary Americans young and old who have been saving for retirement or a down payment on a house.
The S&P 500 slid 77.68 points, or 3.9 percent, to 1,893.21.
The Nasdaq composite shed 179.79 points, or 3.8 percent, to 4,526.25 points.
A selloff in global stocks gathered pace Monday after the steepest one-week decline in years for many major markets. The country is facing a slowdown in economic growth, the banking system is short of cash and investors are pulling money out of the country, experts note.
Many of America’s favorite stocks are now in “bear market” territory, including Disney, Tesla and even Apple. Japan’s Nikkei benchmark tumbled 4.6%.
Hong Kong’s Hang Seng: down 13.7 percent this month, and down 10 percent this year.
Those declines followed tumbles over the weekend in emerging markets such as Egypt, Dubai and Saudi Arabia.
“My biggest concern is that global growth momentum is very fragile”.
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“We have not seen this level of full-blown panic in markets for quite some time”, said Peter Kenny, chief market strategist at Clear Pool Group, a financial technology firm. Beijing’s unexpected move to devalue its currency two weeks ago raised the alarm that the world’s second-largest economy may be in worse shape than many investors had thought. The euro rose to $1.1532 from $1.1138. The 10-year Treasury yield edged down to 2.02%, having earlier dipped below 2% for the first time since April.
