US stocks plunge in early trading after Chinese stock rout

Oil prices fell. But investors also saw opportunity, moving fast and early to snap up some bargains.

Monday marked the seventh straight day of losses on key Asia-Pacific market indices, down nearly 5 percent, the most since 2011.

The Dow Jones industrial average was down 346.07 points, or 2.10 percent, at 16,113.68. The index is down 38 per cent from its June 12 peak, reached after a strong gain early in the year.

The Toronto Stock Exchange plunged in early trading Monday, part of a global downturn affecting markets around the world. It sank the most since 2011 on Friday amid signs China’s economy is weakening, capping its single 5 per cent decline of the year after spending the previous seven months locked in a trading range that had no precedent in a century of market history.

Stocks quickly bounced back somewhat, and a half-hour into trading the Dow was down about 600 points. But the fire sale was short-lived. A wave buying cut the Dow’s losses by half just five minutes later.

With serious doubts now emerging about the likelihood of a U.S. interest rate rise this year, the dollar slid against other major currencies. AGL Resources led among the gainers, rising $13.55, or 28.3 percent, to $61.41. It was the biggest drop in almost four years.

Both Chinese and U.S. stock markets had been on a tear for awhile. “The market topped out last week”, said Adam Sarhan, CEO of Sarhan Capital. And if China’s growth is slowing, global growth may be as well. That was the highest level in at least a decade, according to data from FactSet.

Wall Street had stayed in s narrow range for much of 2015 but volatility jumped this month as investors became increasingly concerned about a potential stumble in China’s economy and after Beijing surprisingly devalued its currency.

Commodity prices fell, with Brent crude petroleum falling past $45 a barrel. Gold futures held at $1,159 an ounce, down 60 cents, or less than 0.1 percent.

Global markets have plunged and commodity prices have hit new lows fed by fears of a slowdown in China. The biggest fallers included banking giant Goldman Sachs, which lost 4.73% while McDonald’s shares fell by 2.49%.

London’s FTSE 100, with its large number of global miners and oil firms, ended down 4.7 percent for its 10th straight decline – its worst run since 2003.

On Frankfurt’s DAX, gas and engineering company Linde slid down by 5.1% while financial services provider Allianz dropped by 4.4% and athletic apparel maker Adidas slipped 2.8% lower.

China’s Shanghai Composite Index fell 8.5 percent Monday, and fears of further declines rippled internationally.