Wall Street Tumbles on Weak Chinese Data

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Wall Street Tumbles on Weak Chinese Data

US stocks suffered their third worst decline this year on renewed concerns over signs of weakness in China’s economy showing that last month’s volatility was yet to abate.

The Dow Jones Industrial Average fell 469.68 points or 2.8% at 16,058.35 points with all 30 of its components ending lower on the day.

The benchmark S&P 500 Index declined 58.33 points or 3% at 1,913 points with all of its ten components ending lower on the day.

The tech heavy Nasdaq Composite fell 140.40 points or 2.9% to end at 4,636.8 points turning negative for the year.

“The problem is, as much as China is the catalyst for this, it’s also that we’re seeing weakness in fundamentals here,” Matt Maley, an equity strategist at Miller Tabak & Co LLC in New York, told Bloomberg.

“A lot of company earnings were hurt by China in the second quarter and it’s only gotten worse. People are losing confidence with the whole situation there breaking down, not just in the stock market but in data as well.”

According to a report released on China’s official manufacturing purchasing manager’s index for the month of August tumbled to its lowest in more than three years underlining growing concerns over the state of the country’s economy.

The disappointing data saw a slump in European and Asian stocks and declines in commodity prices on worries that the weak Chinese economy would drag the global economy lower.

Adding to the anxiety, the head of the International Monetary Fund Christine Lagarde said that the global economic outlook would be weaker than expected a few months ago.

“The fact we were down in August at a magnitude that is bigger than we have seen in many years rang some alarm bells,” Mohannad Aama, managing director of Beam Capital Management LLC in New York, told Reuters.

“The continued uncertainty about China is definitely adding to worries.”

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com