US stocks suffered one of their most volatile session with the Dow Jones Industrial Average plummeting by more than 1000 points after the bell, rallying to recover most of the losses and then slipping towards the final bell to record its biggest drop in more than four years.
The benchmark S&P 500 Index on the other hand, slipped into correction territory during the session having lost more than 10% since its most recent peak on May 21st.
The Dow Jones Industrial Average ended more than 588.47 points or 3.6% lower at 15,871.28, its lowest close since Feb 2014. Al 30 components of the blue chip index ended lower on the day.
The S&P 500 Index lost 77.68 points or 3.9% during the session to end at 1893.21 points, its lowest close since October 2014. All ten of its key sectors and all its 500 components ended lower.
The tech heavy Nasdaq Composite dropped 179.79 points or 3.9% at 4,526.25 points.
“If things don’t settle down in China, we could have another ugly open (Tuesday) and you wouldn’t want to be caught holding positions you bought this morning,” Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin, told Reuters.
The selloff was attributed to a global rout in stocks and commodities and continued loss of confidence over China’s economy.
A number of investors unloaded stocks before the close looking to make money from the stocks market’s volatility with more than m14 billion shares exchanging hands during the session, the highest volume traded is a single session since August 10 2011.
“Investors in China have lost confidence in the central bank, and it’s a very alarming and difficult situation for the markets,” Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird & Co., which oversees $110 billion, told Bloomberg.
“It ultimately depends on whether the China situation results in a severe economic slowdown. It that happens, it’s going to ripple through the U.S.”
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