Wall Street Posts Major Losses for First Trading Day of 2016

The Standard & Poor’s 500 index edged up 4.04 points, or 0.2 per cent, to 2,016.70.

Investors returning to the market after the New Year holiday faced a worldwide sell-off sparked by weak factory data in China, and a reading that showed the fastest contraction in United States manufacturing in six years added to anxiety that slowing growth in the world’s second-largest economy is spreading.

At one point the Dow was down more than 450 points, and there was more of a significant drop in China.

Investors are trying to ascertain China and the Saudi-Iran rift “should be something that we should worry about for much of this year, or whether it was simply an opening day flash in the pan”, said Sam Stovall, chief investment strategist at S&P Capital IQ.

After suffering its worst year since 2011, the FTSE 100 closed down 158.89 points, or 2.39pc, to 6,093.43.

It’s a bleak start to the new year on Wall Street Monday morning: The Dow fell more than 360 points at the open after China’s stock market suffered a huge plunge of its own.

January has been the best month for the Nasdaq composite index since 1971.

U.S. stocks on Monday had joined in a global retreat from equities following a seven per cent plummet in Chinese stocks and tensions between Saudi Arabia and Iran over the Saudi execution of a prominent Iran-backed Shiite cleric. It’s the first time that’s ever happened.

The Stoxx Europe 600 fell 1.3%.

Australia’s S&P ASX 200 fell 1.2%, while Hong Kong’s Hang Seng Index fell 1%, deepening a week of losses for both indexes.

In commodities, Brent crude oil was down around 2% at $35.72 a barrel, hovering near an 11-year low reached in December ahead of weekly US crude inventory and production data later in the day.

Spot gold jumped 1.5 per cent to $1076.57 an ounce on demand for a haven. Treasury prices rose, pushing the yield on 10-year note down to 2.182% from 2.248% on Tuesday.