Allstate Journal

Stocks plunge as Dow tumbles 350-plus; S&P falls to 2,000

Stocks around the world plunged on the first trading day of 2016, with the broad U.S. stock market suffering its worst opening day loss in 15 years amid fresh signs of slowing growth in China, the world’s second-biggest economy. So much for a fresh start on Wall Street, following a lackluster 2015, when the Standard & Poor’s 500 stock index closed down 0.7%, its first down year since 2008.1215-stock-market_full_600

2016 is off to a rocky start as many of the same worries and headwinds that held stocks back last year — such as slowing growth and wildly volatile markets in China and geopolitical angst in the Middle East — have reappeared at the start of the new year, prompting investors to sell stocks and reduce risk. The Dow Jones industrial average, which declined 2.2% in 2015, is down about 350 points, or 2%, to 17.072, after earlier falling nearly 470 points and back below 17,000 for the first time since Oct. 14. The Standard & Poor’s 500 stock index tumbled 2%, recovering slightly from earlier losses that sent it back down below the key 2,000 mark. The S&P is on track for its third worst opening day ever, right behind a 3.7% plunge on the first day in 1932 and a 2.8% loss in 2001.

The tech-heavy Nasdaq composite plunged about 130 points, or 2.4%. The yield on the 10-year Treasury note dropped to 2.22% from 2.27% Friday. “It’s looking to be an ugly start to the new year,” said Josh Selway, analyst at Schaeffer’s Investment Research. “Wall Street is taking a cue from global stocks, which are getting crushed amid a brutal day for China’s Shanghai composite, which plunged almost 7%.”

Like last year’s big scares, China is again the epicenter of investor angst to start 2016. A weaker-than-expected reading on Chinese manufacturing that showed continued contraction in one of the world’s most important economies raised fresh fears about the global growth outlook for 2016 and the profit outlook for companies around the globe. It also sparked a massive stock market sell-off in mainland China, where shares tumbled more than 7%, forcing authorities to halt trading for the day before the normal closing time.


February 2018
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