Last Update 11:59
Monday, 22 July 2019

Wall St falls hard as weak China data stokes fears

Reuters , Tuesday 1 Sep 2015
Views: 1205
Views: 1205

Wall Street slumped more than 2 percent on Tuesday, pushing all three major U.S. indexes into losses for the year after weak data from China added to fears that a slowdown in the world's second-largest economy will constrain global growth.

The sell off was broad. All 10 major S&P sectors were more than 1.5 percent lower while all 30 Dow components were down at least 1.2 percent.

"It's general risk aversion manifesting itself after a really bad August," said Mohannad Aama, managing director, Beam Capital Management LLC in New York. "The continued uncertainty about China is definitely adding to worries."

China's manufacturing sector shrank at its fastest pace in three years in August. Other data showed the pace of growth in the U.S. manufacturing sector slowed in August to its weakest in over two years.

Adding to the nervousness, International Monetary Fund head Christine Lagarde said global economic growth was now likely to be weaker than had been expected just a few months ago.

The weak data pushed oil prices down more than 7 percent, ending three days of gains, and also reduced some investors' expectations that the Federal Reserve would raise interest rates this month.

The S&P energy index declined 2.6 percent, with Exxon down 3.6 percent.

The financial index fell 3.16 percent, with Citigroup falling 4.47 percent.

The CBOE Volatility index, known as Wall Street's "fear gauge", was up 11.78 percent at 31.78, above its long-term average of 20. The index had spiked to 53.29 last Monday.

"We haven't see this kind of volatility in a while. It reminds me of the one we saw during the 2008-2009 crisis," said Art Hogan, chief market strategist at Wunderlich Securities.

"But at some time the buyers will come."

At 2:07 pm, the Dow Jones industrial average was down 2.4 percent at 16,130.91, while the S&P 500 was 2.41 percent lower at 1,924.69. The Nasdaq Composite fell 2.21 percent to 4,671.00.

Up to Monday's close, the S&P 500 had fallen 7.6 percent from its May high as the prospect of slowing global growth and an impending rate hike helped curtail a robust bull-run that saw it gain over 200 percent from the depths of the financial crisis in 2009.

Over the weekend, Fed Vice Chairman Stanley Fischer's comments appeared to indicate a rate hike in September was still in play despite the recent market volatility.

Netflix fell 8.5 percent after Variety reported that Apple was looking to move into the original programming business. Apple fell 2.4 percent.

Declining issues outnumbered advancing ones on the NYSE by 2,592 to 432. On the Nasdaq, 2,210 issues fell and 601 advanced.

The S&P 500 index showed no new 52-week highs and 11 new lows, while the Nasdaq recorded 12 new highs and 41 new lows.

Short link:


Ahram Online welcomes readers' comments on all issues covered by the site, along with any criticisms and/or corrections. Readers are asked to limit their feedback to a maximum of 1000 characters (roughly 200 words). All comments/criticisms will, however, be subject to the following code
  • We will not publish comments which contain rude or abusive language, libelous statements, slander and personal attacks against any person/s.
  • We will not publish comments which contain racist remarks or any kind of racial or religious incitement against any group of people, in Egypt or outside it.
  • We welcome criticism of our reports and articles but we will not publish personal attacks, slander or fabrications directed against our reporters and contributing writers.
  • We reserve the right to correct, when at all possible, obvious errors in spelling and grammar. However, due to time and staffing constraints such corrections will not be made across the board or on a regular basis.

© 2010 Ahram Online.