The Nasdaq composite gave up 112 points, or 2.2 percent, to 4,895. “Understand how much risk you want in your portfolio going forward, and see if there is not an opportunity to selectively delete and add to your portfolio in these down days”. “This isn’t a blip”.
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WALL Street has endured its worst start to the year in more than a decade following the suspension of Chinese share trading yesterday.
The S&P 500 .SPX made its worst start to a year since 2001, down 48.49 points, or 2.37 percent, at 1,995.45, at 12:07 p.m. ET (1707 GMT).
The selling in China spread quickly across markets in other Asian countries, then to Europe.
Declining issues outnumbered advancing ones on the NYSE by 2,269 to 819, for a 2.77-to-1 ratio on the downside; on the Nasdaq, 2,251 issues fell and 598 advanced for a 3.76-to-1 ratio favoring decliners. We’ll learn more about where rates might go after the December payroll report is released on Friday, ahead of the next Fed policy announcement on January 27. “There will be heavy selling in the near future”, Huang said. Olin Corporation, a manufacturer of ammunition, jumped 1.80 percent at the close. Stocks in Australia, Taiwan and Southeast Asia were also lower.
The immediate trigger of the sell-off was a report that showed that manufacturing in China fell in December for the 10th straight month. The survey is expected to show manufacturing is still contracting after reaching a 6 1/2-year low in November. The drop was caused by weak Chinese manufacturing data and escalating tensions in the Middle East. Saudi Arabia over the weekend cut ties with Iran (http://www.marketwatch.com/story/saudi-arabia-severs-diplomatic-relations-with-iran-2016-01-03) after attacks on its embassy in Tehran by people protesting the execution of prominent Shiite Muslim cleric Nemer al-Nemer (http://www.marketwatch.com/story/saudi-arabia-executes-47-including-prominent-shiite-cleric-2016-01-02).
“Oil markets will be concerned that this could be an incremental step in a deteriorating political situation that might ultimately threaten world oil supply”, Ric Spooner, chief analyst at CMC Markets, said in a commentary. Oil was down 30 cents to $36.70 a barrel in New York Mercantile Exchange.
“The U.S. market is driven by traders, not investors, trying to out guess one another”, Brock said. Gold prices were also higher, as the uncertainty spurred a flight to havens.
Apple was the biggest drag on the S&P and Nasdaq, falling 2 percent to $103.16.
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Tesla Motors tumbled 6.9 per cent as it announced it shipped 17,400 cars in the fourth quarter, near the low end of the company’s projected 17,000-19,000 range. The first month has served as a predictor of the full year 72.4 percent of the time, according to analyst Howard Silverblatt of S&P Dow Jones Indices. Netflix and Amazon, both of which more than doubled in price in 2015, were down sharply.
