China and Greece concerns push down US stock market

Particularly with uncertainty about the Chinese currency, “people are saying this is risk, and we step away from the market“. “Even then, the dependent question mark over growth will linger”.

“Having secured… funding to help pay the ECB yesterday and also help recapitalise the banks, the path now remains clear for the still fairly popular Greek prime minister to refresh his mandate”, Hewson added.

Traders in New York were looking at a sea of red on screens Friday as US stocks tumbled, along with other global indices. The Standard & Poor’s 500 index lost 12 points, or 0.6 percent, to 2,085 and the Nasdaq composite fell 24 points, or 0.5 percent, to 5,038.

The U.S. stock market endured its worst performance in 18 months on Thursday, driven lower by another slump in Chinese shares and heavy selling by technical traders. IShares MSCI Brazil (ARCA:EWZ), operating in a recession economy, is down 29% year to date and 52% off its peak.

The declines this week have been broad.

TECH CORRECTION?: The Nasdaq is now about 8 percent off its recent high of 5,218.86 on July 20.

More than $500 billion was erased Thursday as investors targeted the year’s biggest winners such as Netflix.

The factory data followed weaker than expected data in July, plus turbulent changes in the yuan and a brutal stock market plunge.

Analysts at Societe Generale said: “Be it via the crash on the equity market or the surprise FX regime change, China has sent shockwaves through global markets and raised numerous questions on the outlook”. “You typically tend to have a follow-through after big days”.

“China today is no longer just the “factory” of the world”.

“To our minds, the gradual recovery taking shape in the advanced economies can weather what we expect will be a prolonged period of weaker growth in a number of the major emerging markets”, the analysts said.

Markets across the world are feeling the impact of a failing Chinese financial market, which has seen its value drop by up to 30% since June.

CHINA JITTERS: The preliminary version of the Caixin purchasing managers’ index, formerly sponsored by HSBC Corp., fell to an unexpectedly low 47.1 points from July’s 47.8 points on a 100-point scale on which numbers below 50 show a contraction.

The FTSEuroFirst index of 300 leading European shares fell 1.9% and Germany’s DAX fell 2.1% to its lowest since January.

Overnight the Shanghai and the Shenzhen Composite racked up further losses after new data showed Chinese manufacturing activity had hit a six and half year low. >”China has been on a mission to keep up the illusion of a gradual slowdown, but dealers aren’t buying it anymore”, said David Madden, market analyst at IG.

A slowdown in China has the potential to significantly crimp demand for oil.

ENERGY: Benchmark U.S. crude fell 26 cents to $41.06 per barrel in electronic trading on the New York Mercantile Exchange.

“If the Fed does not raise rates in September, does the market therefore assume that growth is too slow?” said Ernie Cecilia, chief investment officer at Bryn Mawr Trust.

Slower global growth may cause the Fed to delay its first rate increase since 2006.

On Thursday, China’s central bank set the yuan’s trading midpoint sharply stronger, at 6.3915 per U.S. dollar compared with 6.3963 a day earlier. “It’s still an open question on whether they would move in September or not”. Among the largest Badger State losers Friday morning were Snap-On Inc.