U.S. stocks fall to their lowest levels since October to start 2016, with the Dow Jones Industrial Average down more than 400 points as a rout in Chinese equities renewed concern that an economic slowdown there will damp global growth.
Investors returning to the market after the New Year holiday faced a worldwide selloff sparked by weak factory data in China, while a reading that showed the fastest contraction in U.S. manufacturing in six years bolstered anxiety that slowing growth in the world’s second-largest economy is spreading. A flareup in tension between Saudi Arabia and Iran added to the unease.
The S&P 500 fell 2.3 percent to 1,996.90 at 12:25 p.m. in New York, after ending 2015 with an annual decline for the first time since 2011. The Dow Jones Industrial Average lost 423.57 points, or 2.4 percent, to 17,001.46. The Nasdaq Composite Index dropped 2.9 percent, while the Chicago Board Options Exchange Volatility Index jumped 24 percent, the most in three weeks. Trading in S&P 500 shares was 30 percent above the 30-day average for this time of day.
Trading was halted in China after a 7 percent drop in the CSI 300 Index of large-capitalization companies listed in Shanghai and Shenzhen amid deteriorating manufacturing data. Chinese policy makers, who went to unprecedented lengths to prop up stock prices during a summer rout, are trying to prevent financial-market volatility from weighing on economy set to grow at its weakest annual pace since 1990.
Source : Bloomberg