Dow Takes Big 530-Point Hit Amid Talks of Chinese Economy Slowdown

Manufacturing unit manufacturing on the earth’s second-largest financial system shrank at its quickest price this month in greater than six years, fueling considerations that China’s sudden slowing could have far-reaching results across the globe. The new bout of global selling followed news of a survey showing manufacturers on the mainland continue to contract.

No. In fact, the Standard & Poor’s 500 index, considered a far broader gauge of the U.S. stock market’s health, is down 7.5 percent from its most-recent high.

KEEPING SCORE: The Dow Jones industrial average was down 408 points, or 2.4 percent, to 16,580 as of 3:09 p.m. Eastern time.

Canadian fertilizer producer PotashCorp fell by 2.9% while US-based specialty chemicals producer Eastman Chemical declined by 2.6%. For the day, the Dow lost 3.1 percent.

“I think there’s no shortage of things people can cite, from the movement in currencies, to the weakness in commodities and fears about China”, said Thomas Lee, managing partner at Fundstrat Global Advisors in New York.

For months, the stock market has been unusually flat, hovering near record highs but unwilling to budge, as investors waited out economic uncertainty in the nation and overseas . “China is definitely slowing and what happens there matters”.

A US recession is not in sight, and with stock valuations such as price to earnings, to book and to sales at or close to 25-year averages, the sell-off may be overdone, said David Kelly, chief market strategist at JPMorgan Asset Management.

“The U.S. markets have held up well of late, being viewed as somewhat of a safe-haven”.

This week alone, the S&P 500 lost $1.1 trillion of value.

Investors also are wrangling with renewed concerns about China’s economy, the resignation of Greece’s prime minister, and looming questions about when the Federal Reserve will raise interest rates, perhaps as soon as September. “They are just waiting and they are going to step back in next week”.

Global financial markets were battered again yesterday, ending a bruising week as investor concern over a slowdown in China showed little sign of abating.

But the Fed appeared to pour cold water on those expectations earlier this week, after minutes released from July’s meeting suggested members of the policy committee weren’t convinced that the global economy could weather a hike at this point.

The losses were broad-based as all 10 sectors of the S&P 500 fell with the technology and energy sectors leading the markets lower.

Declining issues outnumbered advancing ones on the NYSE by 2,391 to 671, for a 3.56-to-1 ratio on the downside; on the Nasdaq, 1,682 issues fell and 1,119 advanced for a 1.50-to-1 ratio favoring decliners.

The FTSE 100 Index suffered its sharpest one-day fall in 10 months today as it plunged 180 points to its lowest level this year amid deepening fears over the Chinese economy. US crude hit fresh six-and-a-half year lows near $40 a barrel as it headed for its eighth straight weekly decline, the longest weekly losing streak since 1986.

West Texas Intermediate crude, the benchmark for U.S. oil costs, fell 2.7 % to $40.21 per barrel for September supply on the New York Mercantile Trade. “So the folks who got scared and got out (of the markets) missed that growth“.