US stocks calm after Monday’s global selloff

The retreat leaves the Dow on track for its worst day since September 1.

We see that in retail sales and consumer spending readings, as well as in earnings reports from the likes of Nike (NKE), Starbucks (SBUX), Apple (AAPL) and others. The energy sector fell 24 per cent, its worst annual performance since the global recession. The slide activated a new circuit-breaker system for Chinese stocks, halting trading on the mainland (http://www.marketwatch.com/story/asian-markets-slide-on-fears-of-stalling-chinese-economy-2016-01-03) for the rest of the day.

The CBOE Volatility Index (VIX – 19.34) settled with a 1.4-point, or 6.6%, loss.

USA stocks tumbled in opening trade Monday.

Futures for the Dow Jones Industrial Average slumped 319 points, or 1.8%, to 17,022, while those for the S&P 500 index lost 37.40 points, or 1.9%, to 1,998. That doesn’t bode well for the Middle East, a key oil producing region. Stocks have recovered even though oil remains down.

That sell-off was in turn sparked by a weaker-than-expected Chinese manufacturing index and worries about the looming end to a selling ban on major shareholders that finishes on Thursday. Asian markets remained choppy, with the Shanghai Composite Index swinging in and out of losses before closing 0.3% lower (http://www.marketwatch.com/story/asian-markets-steady-as-china-moves-to-calm-nerves-2016-01-04).

Gains on Wall Street follow a China-led selloff on Monday, which marked the worst start to the year for the S&P 500 since 2001.

But economic stimulus measures from the European Central Bank have prevented markets from losing too much ground, with the main German and French markets both up some 10 per cent overall in 2015. Treasury yields continued to decline for a fourth straight session, as global stock-market jitters fueled demand for investors perceived as safe, namely government debt.

Amid a quiet day on the United States economic front, trading activity on Tuesday may be somewhat subdued as traders look ahead to key reports due later in the week. On the Nasdaq, 2339 issues fell and 435 advanced.

First Solar Inc was up 8 per cent at $72.02 after Goldman Sachs upgraded the stock to “buy”.