Wall Street falls sharply after China selloff
U.S. stocks tumbled on Monday, putting the Dow on track for its worst start to a year since 1932 after weak Chinese economic data fanned fears of a global slowdown.
Surveys showed factory activity in the world’s second-largest economy shrank sharply in December, sparking a 7-percent slide in Chinese shares that triggered a trading halt.
Adding to investors’ worries, China’s central bank fixed the yuan at a 4-1/2 year low, further weakening it against the dollar.
U.S. data sparked further concern as factory activity weakened unexpectedly in December, according to the Institute for Supply Management.
Amazon (AMZN.O) weighed the most on the S&P and Nasdaq, falling 6.9 percent to $629.56, while the Nasdaq Biotech Index .NBI was down 4 percent.
There was the turmoil overnight overseas that kind of set the tone … (but) all of the negatives out there have been out there for a while,” said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.
“The fact that we closed down on the year, the Fed tightened, it crystallized in investors’ minds that we’re not in the environment we were in throughout most of the recovery.”
The Dow Jones industrial average .DJI was down 417.03 points, or 2.39 percent, to 17,008, the S&P 500 .SPX had lost 47.96 points, or 2.35 percent, to 1,995.98 and the Nasdaq Composite .IXIC had dropped 142.39 points, or 2.84 percent, to 4,865.02.