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Overnight Markets: Dow has worst four-day start to a year ever

A collapse in China’s ailing stock market spread like contagion across the globe, with Wall Street tumbling more than 2%.

 
Overnight Markets: Dow has worst four-day start to a year ever

US stocks plunged on Thursday, giving the Dow Jones and S&P 500 their worst four-day starts to a year ever, as a collapse in China’s ailing stock market spread like contagion across the globe and billionaire investor George Soros warned that a larger crisis may be brewing.

The Dow Jones industrial average closed down 392 points, or 2.32%, to 16,514, the S&P 500 had lost 47 points, or 2.37%, to 1,943 and the Nasdaq Composite had dropped 146 points, or 3.03%, to 4,689.

Chinese stocks traded for less than 30 minutes, slumping 7% and triggering the second emergency market closure this week. The action prompted markets in Europe to retreat and then spread to the US.

Beijing allowed the biggest fall in its yuan currency in five months, adding to investor fears about the health of its economy.

Soros, speaking at an economic forum in Sri Lanka, drew similarities between the present environment and the financial crash of 2008. He said global markets were facing a crisis and investors needed to be very cautious, Bloomberg reported.

Oil prices tumbled to 12-year lows and copper prices touched their lowest since 2009, weighing on energy and materials shares. Shares of Freeport McMoran (FCX.N) fell 9.1%.

Apple (AAPL.O), which generates a lot of its business in China, fell 4.2% to its lowest level since the August market swoon.

Yahoo (YHOO.O) plunged 6.2% after a report the company was working on a plan to cut its workforce by at least 10%. Alibaba (BABA.N), in which Yahoo has a stake, was down 6%.

In the financial sector, JP Morgan Chase slid 4%, while Nordstrom tumbled 5.5%.

Investors also braced for Friday's US government jobs report, which could show how well-insulated the US economy is from international stresses.

In Asia, share markets rallied briefly on Friday after China opened in positive territory but some major markets were back in the red soon after.

The Shanghai Composite was up as much as 3% shortly after the market open before sliding into negative territory, down 1.61%.

Elsewhere, Australian markets slipped lower, with the ASX 200 down 0.46%, Japan's Nikkei 225 higher 0.37%, while Korea's Kospi index was down 0.15%. In New Zealand, the main index was down 1.3%. In Hong Kong, the Hang Seng Index added 0.89%.

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by Jennifer Hill on Dec 02, 2016 at 07:14

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