US: US stocks tumble after China sell-off rocks markets
Tue Sep 1 00:49:51 EST 2009
Mon Aug 31 14:49:51 UTC 2009
NEW YORK, Aug 31 AFP - US stocks opened lower on Monday as a sharp Chinese sell-off weighed on sentiment amid jitters over whether the global economy has enough momentum to pull out of recession.
The Dow Jones Industrial Average dropped 61.37 points (0.64 per cent) to 9,482.83 in early trades.
The tech-rich Nasdaq composite fell 16.91 points (0.83 per cent) to 2,011.86 and the broad-market Standard & Poor's 500 index lost 8.44 points (0.82 per cent) to 1,020.49.
Wall Street stocks followed major European stock indices lower in the wake of sell-offs in Asia as investors worried about the Chinese economy and Japanese election results.
In China, the Shanghai Composite index plunged 6.7 per cent, its biggest one-day drop since June 2008, as concerns over slowing lending growth and a new share supply glut weighed on sentiment, dealers said.
Investors also were focused on a historic victory by the Democratic Party of Japan on Sunday that ended more than half a century of almost unbroken conservative rule in the world's second-largest economy.
The Wall Street action came after the market closed on Friday up some 50 per cent from lows hit in March, but with investors beginning to turn cautious.
On Friday the blue-chip Dow fell 0.38 per cent, snapping an eight-day winning streak. The Nasdaq edged up 0.05 per cent and the S&P 500 slipped 0.20 per cent.
"Widespread losses in foreign markets, which were led by a minus 6.7 per cent decline in the Shanghai Composite, have prompted valuation concerns that are interfering with the bullish sentiment," Patrick O'Hare of Briefing.com said.
"We suspect the understanding that September has been the weakest month historically for the stock market hasn't been lost on participants either."
