U.S. stocks closed higher Monday, with the Dow Jones Industrial Average surging more than 200 points – snapping a seven-day losing streak – its longest in four years.
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Jefferies raised concerns about the demand for the iPhone, primarily in China. At the same time, many investors are also anxious about elevated valuations on some U.S. stocks that aren’t supported by earnings growth.
The Dow Jones industrial average fell 212.33 points, or 1.2 per cent, to 17,402.84.
The broad-based S&P 500 dropped 19.65 (0.94 per cent) to 2,064.42, while the tech-rich Nasdaq Composite Index fell 52.89 (1.05 per cent) to 4,983.90 Chinese data released Wednesday all came in below expectations.
“With the U.S. market a little bit overvalued, it is more susceptible to a disappointment… than it would normally be”, said Jason Pride, director of investment strategy at Glenmede Trust Co., which manages $30 billion.
The S&P 500 index is up 6.50 points, or 0.2 per cent. Mining stocks slumped on disappointing economic news out of China. The other fell sharply today as the markets reacted to outside forces; Soybeans closed about 2.3% lower at $9.7125 per bushel; wheat finished about 3.5% lower at $5.0725 per bushel, and corn finished the day about 3.4% lower at $3.8750 per bushel.
“How bad is the Chinese economy if they’re taking these measures?” said Art Hogan, chief market strategist at Wunderlich Securities.
US stocks feel on Friday with the possibility of increased interest rates as early as next month still being a possibility. (NASDAQ:NETE) which lost 21.21% to settle at 0.26 and Sfx Enterta (NASDAQ:SFXE) which was down 22.62% to 2.36 at the close.
Gold futures settled higher overnight in New York, breaking above US$1,100 an ounce.
Before the open Wednesday, Alibaba (NYSE:BABA) will report earnings.
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Macy’s Inc. cut its sales guidance for the year after reporting steeper-than-expected drops in sales and profit in its second quarter.
