Stocks plunge
Wall St. begins 2016 in the red as Dow slides following steep market drop in China
NEW YORK >> The new year got off to an inauspicious start on Wall Street as stocks tumbled Monday in a global sell-off triggered by new fears of a slowdown in China and rising tensions in the Middle East.
The Dow Jones industrial average clawed back from a steep early decline but still ended the day down 1.6 percent, its biggest drop in two weeks. Markets in Asia and Europe suffered heavier losses.
The wave of selling on the first trading day of 2016 served as a reminder that the global worries that weighed on financial markets last year are not going away anytime soon.
“It’s going to be a turbulent year,” said Kevin Kelly, chief investment officer of Recon Capital Partners. “This isn’t a blip.”
The trouble started in China, the world’s second-largest economy, where signs of manufacturing weakness sent the Shanghai Composite Index plunging 6.9 percent before Chinese authorities halted trading by using a new “circuit-breaker” mechanism for the first time.
Investors were also unnerved by heightened tensions between Saudi Arabia, a huge oil supplier, and Iran. Saudi Arabia severed diplomatic relations over the weekend in a dispute over the Saudis’ execution of a Shiite cleric.
In the U.S., the Dow slumped 276.09 points to 17,148.94. It was down as much as 467 points earlier in the day.
The Standard & Poor’s 500 index lost 31.28 points, or 1.5 percent, to 2,012.66. The Nasdaq composite fell 104.32 points, or 2.1 percent, to 4,903.09.
The selling in China spread quickly across markets in other Asian countries, then to Europe. Key indexes fell anywhere from 2.2 percent to 4.3 percent in Japan, Hong Kong, South Korea, Germany, France and Britain.