U.S. stocks took yet another dramatic plunge in the last hour of trading on Tuesday, renewing fears of a financial meltdown.
The Dow Jones dropped more than 600 points, it’s biggest reversal since 2008.
The wild swing busted a seemingly resurgent session by extending the U.S. markets’ six-day losing streak, and its late surge had analysts rethinking whether the sell-off bleeding had stopped.
The Standard & Poor’s 500, a broader look at the market, and the Nasdaq Composite, an index dense with tech stocks, slid about 1 percent, helping further sink some of the losses from the markets’ steepest two-day free fall since the financial crisis.
Companies that appeared throughout the day to have dodged the unslowing nosedive of Chinese markets were nonetheless stunned by the sudden turn. After a morning in which all Dow stocks pocketed solid gains, the index ended the day at an 18-month low.
The rally had been fueled by interest-rate cuts in China and promising news at home, including new data that showed boosts in new-home sales and improving consumer confidence.
But the broken rally marked a discouraging continuation of market turmoil after several days of chaotic trades, in which many large U.S. companies lost tens of billions of dollars in market value amid a worldwide selling frenzy.
Global markets that seemed to be recovering from the hangover remain far down from long-term highs, and lingering concerns over China’s fragility could lead to even more wild rides.
“Volatility will remain elevated here in the coming weeks,” said Adam Burch, a market investment director for U.S. Trust.
“People have become emotionally engaged and aren’t looking objectively at the market.”
In China on Tuesday, authorities appeared powerless to prevent a further slide in the country’s ailing market, as the country’s main share index plunged for a fourth straight day.
The woes of the world’s second-largest economy have fueled a global sell-off in shares that gathered pace Monday, with the Dow swinging wildly, including with an early 1,000-point free fall, before ending nearly 600 points in the red.
The main Shanghai share index opened Tuesday more than 6 percent lower to set a new eight-month low. A slight recovery was not sustained, and it ended 7.6 percent down.
“At the moment there’s panic in the market, because we have lots of retail investors,” said Wei Wei, an analyst at Huaxi Securities in Shanghai. “We’ve never experienced anything like this in China’s stock market, the speed of the decline and the scale of it.”
The late-day swoon helped to deflate arguments that Monday’s panic was an overreaction to fears of a dramatic Chinese descent.
It came shortly after China’s central bank on Tuesday evening cut interest rates for the fifth time in nine months, another big bid to stimulate the country’s slowing economy.
Global markets have lost trillions of dollars in market value over the last few weeks, erasing all gains for the entire year and stoking fears of a deepening rout.
Latest posts by Sean Adl-Tabatabai (see all)
- Hundreds Of FBI Agents Investigate Clinton For Funding ISIS - January 15, 2017
- Police: George Michael ‘Probably’ Murdered - January 15, 2017
- One Hundred Children Accuse UN Peacekeepers Of Rape - January 15, 2017