Market has worst day in 11/2 years

Rout began in China’s struggling market and quickly spread to European and U.S. markets.

The U.S. stock market endured its worst performance in 18 months on Thursday, driven lower by another slump in Chinese shares and heavy selling by technical traders.

The global rout started in China, where sharp declines in energy and property stocks pushed the Shanghai Composite down more than 3 percent. That selling soon spread to European and U.S. markets, where the Standard & Poor’s 500 index moved further below a closely watched trading level.

Investors, facing screens full of red, retreated to their usu- al places of safety: bonds, gold and cash.

“The emerging markets really got slammed overnight and that quickly spread to the rest of the world,” said J. J. Kinahan, chief strategist at TD Ameritrade.

The Dow Jones industrial average plunged 358.04 points, or 2.1 percent, to 16,990.69. The S&P 500 dropped 43.88 points, or 2.1 percent, to 2,035.73 and the Nasdaq composite lost 141.56 points, or 2.8 percent, to 4,877.49.

It was the biggest percentage decline for the Dow and S&P 500 since February 2014. The blue chip index now is at its lowest level since October 2014.

Buyers of stocks were few and far between. Selling outweighed buying by a ratio of more than eight to one in heavy trading. Still, even with the sell-off, the S&P 500 was down just 4.5 percent from its record close of 2,130.82 on May 21.

As the selling picked up Thursday, investors moved money to traditional havens in times of uncertainty.

Gold rose $25.30, or 2.2 percent, to $1,153.20 an ounce, the metal’s best day since April.

Demand for ultra-safe U.S. government bonds rose, pulling down the yield on the benchmark 10-year Treasury note to 2.07 percent from 2.13 late Wednesday. The 10-year’s yield stood at 2.19 percent only two days before.

Worries over China, the world’s second-largest economy, spurred Thursday’s losses. The Shanghai Composite Index dropped 3.4 percent. Chinese shares have had a wild ride this week and that has raised questions about Beijing’s ability to stabilize the market and the devaluation of that nation’s currency.

The move has caused other countries to devalue their own currencies, notably Kazakhstan and Vietnam.

Strategists and traders, noting the lack of major U.S. economic news on Thursday, said the drop in stocks also likely was tied to programmed selling, which came after the S&P 500 moved below its 200-day moving average.