US markets trade lower on China concerns

The last market correction was four years ago.

European shares followed falls in China that saw Hong Kong’s Hang Seng Index close down more than 5pc in what was the worst trading day in the country for eight years.

Goldstein said consumers could be affected by the stock market wobble, which could trigger a lack of confidence ahead of the all-important holiday season despite relatively good economic data on housing, jobs and manufacturing. Instead, most people base their day-to-day spending decisions on their paycheck and other sources of income, not on their stock market holdings.

“Investors are still concerned about exogenous growth and shifting Fed policy, and both of those are still on the table”, said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

Falling or rising stock prices, even when the market changes dramatically, typically do not have a large or immediate effect on sales at stores, restaurants or other retailers.

The smartest move in the past few days was to not panic and dump stocks. That was the highest level in at least a decade, according to FactSet. The euro rose to $1.1568 from $1.1388. But that doesn’t mean it’s going to drag the U.S. economy or stock market along with it. Hong Kong’s Hang Seng index fell 5.2 percent, Australia’s S&P ASX/200 slid 4.1 percent and South Korea’s Kospi lost 2.5 percent.

The PBOC lowered its benchmark lending and deposit rates by 0.25 percentage point, adding that the rate cuts will become effective on 26 August and are aimed at reducing corporate borrowing costs. The yield on the 10-year Treasury note fell to 2.03 percent.

Oil prices are up, but U.S. crude is still trading below $40 a barrel. Gold and silver also fell.

Citrix Systems was down the most among stocks in the S&P 500, shedding $4.62, or 6.2 percent, to $69.36. The Shanghai Composite index rose 140 percent in 2015.

A rally in U.S. stocks evaporated in the minutes before the closing bell Tuesday, sending the Dow Jones industrial average down more than 200 points and extending Wall Street’s losing streak to six days – the longest such stretch in more than three years. Treasurys surged as investors bought less risky assets.

At one point Tuesday, the Dow was up as much as 441 points. Less than an hour after the open, the decline had been reduced to about 300 points.

Half of America has money invested in the stock market.

U.S. stocks are sharply higher in midday trading after China’s central bank cut its key interest rate in a bid to boost growth in the world’s second-largest economy.