ANOTHER WALL STREET ROUT AS DOWDROPS 392

Nasdaq moves into correction territory as China angst spreads

Wall Street’s worst opening to a new year since 2008 got even uglier Thursday when repeated waves of selling sent the Dow tumbling almost 400 points and the Nasdaq into correction territory amid a global stock rout that started when a 7% plunge led China to halt its market trading again.

The Dow Jones industrial average lost 392 points, or 2.3%, to 16,514. The Standard & Poor’s 500 index lost 2.4% to 1943. The real drama was in the tech-heavy Nasdaq composite, which plunged 3% to 4689, leaving it

more than 10% below its July record close and officially in correction territory.

The sledding continues to be treacherous on Wall Street, which started the session already off to its worst three-day start to a new year since the financial crisis in 2008. And China again was the epicenter of the sell-off. Sparking angst was a freefall in stocks at the start of trading there, which triggered a shutdown of the market about 30 minutes into the session and the second trading halt this week.

After the rout in the Chinese stock market Thursday, authorities suspended the new trading “circuit breakers” that are intended to dampen panic but which many market watchers argue sowed more panic, according to China’s official news agency Xinhua. The circuit breaker system was implemented at the start of this year.

Stocks are selling off around the world because of major volatility in China’s stock market early this year. Fears of a bigger-than-expected slowdown in the world’s second-biggest economy are on the rise, which is a negative for markets as China has been one of the world’s biggest drivers of growth in recent years.

Adding to the angst were North Korea’s claim it detonated a hydrogen bomb, saber-rattling between Saudi Arabia and Iran and a renewed slide in oil prices.

U.S.-based strategists say the massive volatility to start the year is not the start of another 2008-style financial crisis, but rather a big correction similar to the big China-inspired drop last August.

“This is very much August all over again,” says David Kelly, chief global strategist at JP Morgan Funds. “The problem is no one knows where the bottom is for Chinese stocks or for (its currency) the yuan.”