The New York Stock Exchange invoked a rule saying market makers don’t have to disseminate price indications before the opening bell in an effort to make it easier and faster to open stocks on a volatile trading day.
U.S. stocks are closing sharply lower, with the Dow Jones industrial average down more than 588 points and the Standard & Poor’s 500 index now down more than 10 percent off its recent high.
Those losses were pared down by mid-day with the Dow and S&P both down less than 1 percent at one point.
The S&P (SPX) lost almost 78 points, or 3.9 percent, at 1,893. China’s main index sank 8.5 percent, its biggest drop since the early days of the 2008 global financial crisis.
London’s FTSE 100 index was down 4 percent or more by early afternoon, while major markets in France and Germany fell 4. percent and 4.4 percent.
The shakeout in stocks around the world came in the wake of growing concerns among investors about the threat posed to global growth by the economic slowdown under way in China – a major engine of the world economy.
The Dow plunged as much as 1,000 points at the open on Monday – before clawing its way back. The current panic in the stock market began last week when China did a surprise devaluation of its currency. The 10 sectors in the S&P 500 headed lower, with energy stocks notching the biggest decline, 2.8 per cent. The sector is down 23.5 per cent this year.
Alibaba was down about 3 percent at $66.15, below its IPO price of $68, making it the second high-profile tech company to fall below its IPO price in the past week after Twitter on Thursday.
Monday marked the seventh straight day of losses on key Asia-Pacific market indices, down nearly 5 percent, the most since 2011.
The New Zealand market fell 2.5 percent.
Chinese investors monitor stock prices at a brokerage house in Beijing, August 24, 2015. The market is still only at a 10-month low, meaning investments are still worth more than they were as recently as a year ago – and you’re likely way ahead if you’ve been in the market for longer than that.
Bernard Aw, market strategist at IG, told the Associated Press news agency: “There is a lot of fear in the markets”. On the Nasdaq, 2,326 issues fell and 520 advanced.
“My biggest concern is that global growth momentum is very fragile”. The euro rose to $1.1568 from $1.1388. Many emerging market currencies – including Russia’s ruble – were tumbling against the U.S. dollar.
US crude was last down 3.9% at about $38.85 a barrel and Brent fell 4.3% to $43.51 to take it under January’s lows for the first time as concerns about a global supply glut added to worries about weaker demand from the normally resource-hungry China.
Fears about China’s economy is driving the uncertainty.
That shift in thinking was implied by the fall in the US dollar and by a big drop in yields for the US Treasury bonds.