The Dow Jones Industrial Average fell 392.41 points (2.32 percent) to 16,514.10. In fact, China’s central bank raised its target rate for the yuan for the first time in over a week.
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The S&P 500 index gave up 47.17 points, or 2.4 percent, to 1,943.09.
The wave of selling has knocked the Dow down 911 points, or more than 5% so far this year.
Elsewhere, Australian markets slipped lower, with the ASX 200 down 0.46%, Japan’s Nikkei 225 higher 0.37%, while Korea’s Kospi index was down 0.15%. “Given the extreme risk-off nature of our first four days of trading this year, bargain hunters may be enticed to step into the market”.
Tech stocks and small-company shares have been hit even harder. The Nasdaq composite fell 89 points, or 1.9 percent, to 4,746.
“People see the weakness in China and in the overall equity market and think there’s going to be an impact on corporations here in the United States”, said Robert Pavlik, chief market strategist at Boston Private Wealth in NY. Chinese stocks nosedived on Thursday, triggering the second daylong trading halt… But shares of the Shanghai composite index ended up 1.97% Friday, stabilizing global markets and capping off the worst week for the Chinese stock market in its short 25-year history. China’s main stock index plunged 7 percent before trading was automatically halted after just 30 minutes.
“While investors are concerned about the slowdown in the Chinese economy, the question now is whether the authorities have the ability to prop up the market”, Brown said.
US stocks are now at three-month lows.
Stocks and oil prices plunged again Thursday on spreading fears that China’s economy, a major engine of global growth, is sputtering. China on Thursday suspended new rules that triggered the market shutdowns, in a bid to calm investors.
S&P 500 e-minis were up 12 points, or 0.62 percent, with 291,281 contracts traded.
In Asia, share markets rallied briefly on Friday after China opened in positive territory but some major markets were back in the red soon after.
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Despite significant geopolitical news influencing prices for gold and oil, China has dominated analysis of Wall Street activity, with the latest sell-offs considered a correction on worries surrounding the Asian giant’s local market. Dow member Chevron lost 3.5% while mid-sized producers Apache and Anadarko Petroleum shed 5.1% and 8.4%, respectively. On the Big Board, decliners outpaced advancers by 6.2-to-1, and on the Nasdaq, decliners led by 6.1-to-1. The yuan has fallen to its weakest level since March 2011.
