US stocks fall on weak Chinese economic data

The Dow Jones industrial average fell 212.33 points, or 1.2 per cent, to 17,402.84. The S&P 500 rallied 1.3% to 2104, while the NASDAQ added 1.2% to 5102.

The Dow Jones fell by 46.37 points to 17373.38. The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 8.66% to 12.23.

The Dow (INDEXDJX:.DJI) tumbled 207.01 points, or 1.19 percent, to 17,195.83. China’s central financial institution beforehand devalued its tightly managed foreign money Tuesday because the Individuals’s Financial institution of China allowed the yuan to depreciate 1.9 % towards the greenback, marking the most important one-day loss within the yuan since 2005.

The yuan dropped to 6.42 per U.S. dollar on Wednesday, its weakest level in four years. Yahoo, which has a large stake in Alibaba, fell 5.6 percent.

The benchmark Shanghai Composite Index jumped 3.7 percent as China announced new rules restricting short selling, lifting a volatile market that has been a source of unease for investors globally.

The devaluation will make Chinese-made goods less expensive in global markets, and imports to China more expensive, which investors fear could have negative implications for U.S. multinationals – and the U.S. economy. Nasdaq 100 futures are down by 0.61%, trading at 4,546.

This raised speculation that the Federal Reserve will hike interest rates for the first time in nearly a decade – perhaps as early as next month.

Unlike yesterday though, commodity prices and currency are moving higher (the AUD has reversed +1.4% off its lows) despite the further decline in CNY.

Part of this boost, researchers at Capital Economics said, was due to a downward revision to May data.

Almost all 30 stocks on the Dow traded lower, led by iPhone maker Apple Inc. European equities additionally traded decrease because the pan-European Stoxx 600 declined greater than 2 % on the open. (NASDAQ:AAPL), which sank 2.5 %. Energy giant Chevron Corporation (NYSE:CVX) was the only gainer, up just 0.2 percent.