U.S. stocks brace for nasty day

“China devaluing its currency sparks concern that the global growth engine is starting to slow and that creates a dump of any high-flying stocks or anything people perceive as risk”, said Yousef Abbasi, a market strategist at JonesTrading Institutional Services in NY. The Dow Jones industrial average sank 2.3 percent and the Standard & Poor’s 500 lost 2.4 percent on Thursday. The Nasdaq fell 146 points, or 3 percent, to 4,689.

Chinese stock exchanges closed early Thursday after the CSI 300 Index dropped more than 7%.

China’s securities regulator on Thursday night suspended its new stock circuit-breaker that caused the sharemarket halts this week, and imposed new limits on the amount of stock that major corporate shareholders can sell.

US stocks closed Friday with a triple-digit loss, having bounced in and out of positive territory in choppy trading as investors were whipsawed by the effects of fluctuating oil prices and robust USA job growth data.

Treasury yields held in a range, with the 2-year yield at 0.96 percent and the 10-year yield at 2.15 percent as of 12:23 p.m. ET. The price of copper declined 6.6 cents, or 3.2 percent, to $2.022 a pound. Alibaba (BABA.N), in which Yahoo has a stake, was down 6.6 percent at $72.25.

The global panic attack is being fueled by fears about China and the intensifying plunge in crude oil prices.

Market analysts have been saying that stocks around the globe had become severely “oversold” due to the intense selling to start the new year.

“But it’s even more particularly true in China where we get a lot of official intervention in the market, and we also are restricted in who can access that market”.

The report is expected to show that USA employers likely maintained a fairly strong pace of hiring in December, with nonfarm payrolls expected to increase by 200,000, and unemployment rate holding steady at 5 percent.

“This has all the earmarks of the beginning of a significant stock market correction”.

This is the second time this week newly-implemented circuit breakers in China have been triggered by steep falls for stocks. The S&P down 2.37% and the Dow industrial average down 2.32%.

Peter Boockvar, chief market analyst at The Lindsey Group, said the move could take some short-term pressure on Chinese stocks but won’t be a cure-all.

Oil prices are hovering near new historical lows with Brent oil prices falling yesterday 2.1% to $33.27 a barrel and WTI falling 1.6% to $33.69 a barrel. New reports released this week reinforce concerns that China is slowing down more than investors realized. American Eagle tumbled $2.64, or 16.6 percent, to $13.24.

The price of gold and silver both rose more than 1 percent, with gold at $1,103.90 an ounce and silver at $14.16 an ounce.

No such fall occurred there on Wednesday, with the Shanghai Composite actually making gains of 2.3%, but USA investors’ fears were compounded by other events, including North Korea’s announcement that it had tested a hydrogen bomb.

Wine and sprits distributor Constellation Brands jumped 5.3 percent as third-quarter earnings rose 21.7 percent to $270.5 million and it lifted its full-year forecast.

Apple shares snapped their three-day losing streak and were up 1.9 percent in early trading, giving the biggest boost to the S&P and the Nasdaq.