Earlier in the day, after dropping more than 1,000 points, or nearly 7 percent, at Wall Street’s open, the Dow Jones industrial average had eased losses and was off less than 2 percent in afternoon trading.
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Fresh evidence of the slowdown in China’s economy sparked a wave of selling Friday in Europe and the U.S. that culminated with the S&P 500 losing almost 6 percent for the week in its worst weekly slump since 2011.
In addition, the Dow Jones industrial average dropped 530.94 points and declined more than 3 percent.
The S&P 500 fell into correction territory – meaning a drop of 10 percent or more from a recent peak.
China’s Shanghai Composite Index fell 8.5 percent Monday, and fears of further declines rippled internationally. The rout continued overnight as China’s main stock index sank 8.5 percent.
London’s top-flight was more than 6%, or 400 points, lower during the session as contagion from China’s growth slowdown spread across the globe.
The Shanghai market suffered a thumping loss of all of its gains for 2015 – though it is still more than 40 per cent above its level a year ago.
“It was set up for situations like this”, said Art Hogan, chief market strategist at Wunderich Securities. “When you unwind a bubble, it doesn’t stop at 30 percent, or even 35 percent, especially those investors are highly leveraged – these are Chinese investors, 90 million of them – that is precisely what is going on, and it doesn’t stop at 35 percent”.
European stocks fell Monday, too, down about six percent.
Energy is still a substantial part of the U.S. economy and stock market.
Market corrections such as the one that U.S. equities have experienced in the past couple of trading days are certainly nothing new.
U.S. investors woke Monday to sharp new losses on stock markets around the world.
Apple has depended on China for growth in recent years, so it made sense the shares would be hit by concerns that a weak economy there could result in fewer gadget sales.
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The dollar weakened against other major world currencies such as the euro, British pound and yen, on speculation that the global market turmoil may push back a U.S. interest rate rise. Retirement advisers say that you should have a mix of large-cap, mid-cap and small-cap stocks, global stocks and government and corporate bonds.
