Wall Street: Dow has worst one-day drop since Septem­ber.

Surg­ing anx­i­ety about the Asian na­tion’s econ­omy spurs the worst one-day drop since late Septem­ber.

The Denver Post - - BUSINESS - By Mar­ley Jay

new york» Stocks and oil prices plunged again Thurs­day on spread­ing fears that China’s econ­omy, a ma­jor en­gine of global growth, is sput­ter­ing.

It was the worst one-day drop since late Septem­ber, and the main U.S. bench­mark, the Stan­dard & Poor’s 500 in­dex, has now had its worst four-day open­ing of a year in history.

The lat­est bout of mar­ket volatil­ity came af­ter China al­lowed its cur­rency to weaken fur­ther, a dan­ger­ous omen for the world’s sec­ond-largest econ­omy. That helped set off a 7 per­cent plunge in China’s main in­dex, caus­ing trad­ing to be halted af­ter just 30 min­utes.

The malaise spread across con­ti­nents, send­ing in­dexes sharply lower in the U.S. and Europe. The price of U.S. crude oil plunged to its low­est level since 2004 as traders wor­ried that weak­ness in China would trans­late into lower global de­mand.

The sell­ing in the U.S. has been con­cen­trated in tech­nol­ogy stocks, which could suf­fer if de­mand for iPhones and other elec­tron­ics weakens. Ap­ple sank 4 per­cent and has fallen 27 per­cent since July.

Thurs­day’s drop pushed the tech-heavy Nasdaq com­pos­ite in­dex into what mar­ket watch­ers call a “cor­rec­tion,” or a drop of 10 per­cent from a re­cent peak. The Nasdaq has fallen for six days straight.

China could be in store for more de­clines af­ter that coun­try’s mar­ket reg­u­la­tor sus­pended au­to­matic trad­ing halts that were put in place Jan. 1. Those halts, which were trig­gered twice this week, are in­creas­ingly seen as in­ad­e­quate mea­sures to pre­vent volatil­ity.

Chi­nese stocks were volatile Fri­day, and other Asian mar­kets re­bounded af­ter Thurs­day’s plunge.

The Shang­hai Com­pos­ite In­dex was up 2.4 per­cent at 3,199.56 by late Fri­day morn­ing af­ter swing­ing be­tween gains and losses.

“The man­age­ment of the Chi­nese econ­omy is the real con­cern,” said John Canally, chief eco­nomic strate­gist at LPL Fi­nan­cial. “All that mat­ters for mar­kets right now is ‘China can’t get their act straight.’ ”

The Dow Jones in­dus­trial av­er­age sank 392.41 points, or 2.32 per­cent. At one point, it was down 442 points, or 2.6 per­cent.

The S&P 500 in­dex gave up 47.17 points, or 2.4 per­cent. The Nasdaq com­pos­ite in­dex dropped 146.34 points, or 3 per­cent, to 4,689.43.

While the Nasdaq is so far the only ma­jor U.S. in­dex to en­ter a cor­rec­tion, the other two are get­ting close. The Dow av­er­age is down 9.8 per­cent from its peak in May, and the S&P 500 in­dex has lost 8.8 per­cent.

Euro­pean mar­kets also dropped. Ger­many’s DAX slid 2.3 per­cent, France’s CAC 40 gave up 1.7 per­cent, and Bri­tain’s FTSE 100 lost 2 per­cent.

The price of U.S. crude oil dipped to 12year lows as in­vestors wor­ried that world­wide de­mand will fall even far­ther. It sank 70 cents, or 2.1 per­cent, to $33.27, its low­est close since Fe­bru­ary 2004. Brent crude, the bench­mark for in­ter­na­tional oils, lost 48 cents to $33.75 a bar­rel in Lon­don. Brent is trad­ing at 11-year lows.

Thurs­day’s sell­ing was linked to weak­ness in the yuan, as the gov­ern­ment’s de­ci­sion to let the cur­rency get weaker might be a sign of weak­ness in China’s econ­omy.

“China’s been such a big driver of global growth for 15 years, and now they’re not, and they don’t seem to have a plan for the next 15 years,” Canally said.

A dis­play in Beijing shows the se­cu­rity fea­tures of the new 100 yuan note Thurs­day. This week’s drop in Chi­nese stocks was fu­eled by con­cern the cur­rency is weak­en­ing too fast against the U.S. dol­lar.

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