Behind that were signs Beijing is struggling to prevent a stall in the world’s second largest economy, and that its actions, like the devaluation of the Yuan last week, was having a negative impact throughout emerging markets and would drag in developed economies as well.
That was followed by more bad news for the markets after a survey showed the manufacturing sector on the Chinese mainland continued to shrink.
US chemical stocks fell once again on Friday as the Dow Jones Industrial Average dropped by more than 2% for the second day in a row.
The Dow Jones industrial average closed down 530 points, the ninth-biggest point decline in its history, NBC News reported.
Oil’s run of weekly losses is its worst since 1986. Netflix is down 7.6% today in addition to the 7.8% it fell during trading yesterday.
That’s unwelcome news for anyone with a 401(k) invested in stocks, but they shouldn’t panic and try to time the market’s swings, said Quincy Krosby, market strategist for Prudential Financial. “Markets will now surely have to firm up considerably for the Fed to pull the trigger next month”, said Deutsche Bank analyst Jim Reid.
More than 10.5 billion shares traded hands in the U.S. today, the most since December, as the rout in stocks and the expiration of options boosted trading volume.
The fall in oil prices is hurting U.S. energy stocks too. Driving the gold boom is the Fed’s fear of stubbornly low inflation, and market watchers have taken note: They have now shifted their bets on a September rate rise to a date later in the year, or even early next year. European equities sold off for a third day, with the Stoxx Europe 600 Index declining 13 percent from its record and in correction mode.
The S&P 500 shed 3.19 per cent in the session and 5.77 per cent for the week – a loss representing some $US1.14 trillion in share value.
But the uncertainty sparked by another Greek election, and a hotly anticipated meeting of the Federal Reserve next month amid expectations of the first US interest rate hike in nearly a decade, are also likely to keep markets on tenterhooks for the coming weeks.
“There s no shortage of things people can cite, from the movement in currencies, to the weakness in commodities and fears about China“, Lee said. It said it expects the weak agriculture and energy sectors to continue dragging down equipment sales.
In the Forex markets, the euro lost some of its overnight impetus as it was pushed to a two-month high by those looking to get out of thumped Asian currencies and China’s envoy’s such as the Aussie and Hong Kong dollars. The S&P 500 dropped about 3.2% to 1970.89.
In Asia, the Shanghai Composite index suffered another steep drop of 4.3 percent. Gold was up 0.55% at $1,159.60 an ounce. U.S. oil prices also briefly dropped below $40 a barrel on Friday, a level not seen since the financial crisis.
US crude CLc1 edged higher after earlier hitting its lowest since March 2009, while Brent LCOc1 dropped 2.3 per cent to its lowest since January.
A wide range of commodities have been hammered this year as demand for raw materials has cooled and as the U.S. dollar gains strength against currencies used by developing countries.