US stocks slide again as China woes lead to global selling

A man walks past an electronic stock board of a securities firm in Tokyo, Friday, Jan. 8, 2016. USA stocks are opening modestly higher as trading stabilizes a day after a plunge in China unsettled investors around…

All 10 industrial sectors of the S&P 500 are falling, but the market has recovered from its worst losses of the day.

Steep falls in oil prices are compounding the worldwide stock market sell-off, with the cost of benchmark Brent crude collapsing to fresh 11-year lows, sinking below 33 United States dollars a barrel.

Trading was halted only 13 minutes into the morning session.

The selling spread across continents, sending indexes sharply lower in the US and Europe. J.J. Kinahan, chief markets strategist for TD Ameritrade, said that’s making bonds more appealing. “All that matters for markets right now is ‘China can’t get their act straight'”. For the second time in four days, trading was suspended under new circuit breaker rules unveiled this week. Those halts, which were triggered twice this week, are increasingly seen as inadequate measures to prevent volatility.

Most of the blame goes to China, which is believed to be the biggest threat to USA stocks this year. With the drop, the index has fallen to its lowest intraday level in well over six years.

The Dow Jones dropped almost 400 points today. Alibaba, in which Yahoo has a stake, was down 6.6 percent at US$72.25. Japan’s Nikkei 225 Index fell by 0.4 percent, while Hong Kong’s Hang Seng Index rose by 0.6 percent.

In the eurozone, the Paris CAC 40 index shed 1.3 percent and Frankfurt’s DAX 30 lost also 1.3 percent compared with Tuesday’s close.

European markets were also lower while there were gains on Wall Street after stronger than expected USA jobs figures, soothing fears about the economy’s health.

The U.S. Treasury benchmark yield hit its lowest in more than two weeks on safe-haven demand and on signs that a lack of inflationary pressures could slow the pace of Federal Reserve interest rate hikes this year.

Declining issues outnumbered advancing ones on the NYSE by 2,704 to 415, for a 6.52-to-1 ratio on the downside; on the Nasdaq, 2,492 issues fell and 390 advanced for a 6.39-to-1 ratio favouring decliners.

“You don’t shut down the world’s second-largest economy in 29 minutes”, Armstrong said. American heavy-equipment maker Caterpillar is seeing sales weakening not only in China but also in Brazil and other countries that dig out the commodities China used to be so hungry for. Natural gas declined 5.6 cents, or 2.5 per cent, to $2.267 per 1,000 cubic feet. The Nasdaq composite fell 89 points, or 1.9 percent, to 4,746.

The markets have endured a rough few days to start 2016.

QUOTEWORTHY: “I didn’t expect 2016 to be anything other than a roller-coaster, but we’re really starting off the roller-coaster really early”, said Michael Every, head of Asia-Pacific financial market research at Rabobank.

“China’s been such a big driver of global growth for 15 years and now they’re not, and they don’t seem to have a plan for the next 15 years”, Canally said. Gold, which tends to rise during times of fear, jumped 1.4% to $1,093 an ounce. S&P 500 e-minis were down 45 points, or 2.27 percent, with 578,860 contracts traded.

Netflix, which announced a global expansion on Wednesday, is down 3.2%. US crude dipped 59 cents to $33.37 a barrel in NY.