US stocks slump; Dow ends down 588 after early 1,000-pt. slide

[webfact]

Stocks slump; Dow ends down 588 after early 1,000-pt. slide
By ALEX VEIGA and STEVE ROTHWELL

NEW YORK -- U.S. stocks slid again Monday, with the Dow Jones industrial average briefly plunging more than 1,000 points in a sell-off that sent a shiver of fear from Wall Street to Main Street.

Stocks regained some of that ground as the day wore on, but the Dow finished with a loss of 588 points, the eighth-worst single-day point decline and the second straight fall of more than 500.

The slump — part of a global wave of selling touched off by signs of a slowdown in China, the world's second-largest economy — triggered worries among Wall Street professionals and ordinary Americans who are saving for retirement or a down payment on a house.

With the lease on her car up, health insurance worker Deirdre Ralph of Wayne, New Jersey, had planned to get a less pricey vehicle and invest the savings. Now she's having doubts.

"That money, I wanted to take and put it toward my retirement," said Ralph, 61. "Should I? Or should I just have a great old time?"

The Dow ended up losing 588.40 points, or 3.6 percent, closing at 15,871.35. As scary as the sell-off was, the Dow's decline doesn't even make the list of the Top 10 biggest drops in percentage terms.

The Standard & Poor's 500 index slid 77.68 points, or 3.9 percent, to 1,893.21, and is now in "correction" territory, Wall Street jargon for a drop of at least 10 percent from a recent peak. The last market correction was nearly four years ago.

The Nasdaq composite shed 179.79 points, or 3.8 percent, closing at 4,526.25.

All three major indexes are down for the year.

"There is a lot of fear in the markets," said Bernard Aw, market strategist at IG.

U.S. stocks have been on a bull run for more than six years, after bottoming out in March 2009 in the aftermath of the financial crisis and the Great Recession. The rout began in China last week and continued on Monday, when the country's main stock index sank 8.5 percent.

China concerns aside, U.S. stocks have been primed for a sell-off for several months, said Jim Paulsen, chief investment strategist and economist for Wells Capital Management.

"I've been of the view since late last year that this market is in a vulnerable position," he said. "It's gone almost straight up for six years."

Stocks have kept rising even as corporate earnings growth has slowed. The price-earnings ratio for the S&P 500, a measure of how much investors are willing to pay for each dollar of company earnings, climbed as high as 17.2 in March. That was the highest level in at least a decade, according to FactSet.

The Dow plummeted 1,089 points Monday within the first four minutes of the opening bell as traders dumped shares. But a wave of buying by bargain-hunters cut the Dow's losses by half just five minutes later.

The U.S. market slide was broad. The 10 sectors in the S&P 500 headed lower, with energy stocks recording the biggest decline, 5.2 percent, amid a slump in the price of oil. The sector is down almost 25 percent this year.

U.S. Treasurys surged as investors bought less risky assets. The yield on the benchmark 10-year note fell to 2.01 percent from 2.04 percent.

Oil, commodities and the currencies of many developing countries also tumbled on concerns that a slowdown in China might hurt economic growth around the globe. Crude oil closed below $40 a barrel for the first time since early 2009. Gold and silver also fell.

In Europe, Germany's DAX stock index fell 4.7 percent, while the CAC-40 in France slid 5.4 percent. The FTSE 100 index of leading British shares dropped 4.7 percent.

In Asia, Japan's Nikkei index fell 4.6 percent, its worst one-day drop since in over 2½ years. Hong Kong's Hang Seng index fell 5.2 percent, Australia's S&P ASX/200 slid 4.1 percent, and South Korea's Kospi lost 2.5 percent.

The Shanghai index suffered its biggest percentage decline in 8½ years. China is facing a slowdown in economic growth, the banking system is short of cash, and investors are pulling money out of the country.
___

AP Writer Deepti Hajela contributed to this report from New York.


-- (c) Associated Press 2015-08-25

[BuaBS]

The "guru's" were betting on september /october for the big crash , I guess it started early.

This is good news , maybe at last the big reset is coming , starting with the stock bubble. Let's see if the PPT can support the stockmarket , when everybody is panic selling.

[sammygood]

hold on to your butt, time for a new 2008 chapter ?

[Steely Dan]

We live in a world where quantitative easing is a permanent reality in order to keep interest rates low so unsustainable debt is not defaulted on. There will be a stock market level where defaults will crash the world financial system, you can be assured the printing presses will be working faster than Iranian centrifuges to prevent this level being reached.

Before the Neo-Keynesians became universally accepted Milton Freedman and Ludwig Von Mises preached fiscal prudence and an honest financial system, I believe their school will be vindicated when the Keynesians finally destroy the financial system with a hyper inflationary bust - hopefully the current long bull market will end with just a scary correction leaving the final collapse for later.

[fang37]

Bring it on!

I love to see blood in the streets (but not mine).

[metisdead]

Maybe a relief is in sight, the US markets are indicating a strong opening: http://finance.yahoo.com/

[Usernames]

Covering at the open just enough to bring in the retail buyers. Short will reload sometime during the day on Wall St.

[Usernames]

Covering at the open just enough to bring in the retail buyers. Short will reload sometime during the day on Wall St.

Toldyaso.

[metisdead]

Maybe a relief is in sight, the US markets are indicating a strong opening: http://finance.yahoo.com/

A bummer of an outcome

[webfact]

US stocks extend losses as early rally fades
By ALEX VEIGA

NEW YORK: -- Just when it looked as if the bleeding had stopped, it started up again.

A rally in U.S. stocks evaporated in the minutes before the closing bell Tuesday, sending the Dow Jones industrial average down more than 200 points and extending Wall Street's losing streak to six days — the longest such stretch in more than three years.

Where the market might bottom out is anyone's guess — not exactly comforting news to anyone whose retirement savings or down payment on a house are tied up in stocks.

The rally came after China lowered interest rates to try to boost its slowing economy. Other world markets surged on the news out of Beijing, and for a while, it looked as if U.S. stocks would follow suit and the global sell-off might stop.

Stocks also got a lift from economic reports showing a rebound in U.S. consumer confidence and sales of new American homes.

At one point Tuesday, the Dow was up as much as 441 points. But sell orders began pouring in in the last 15 minutes of trading, and stocks swung abruptly from positive to negative territory.

The Dow ended with a loss of 204.91 points, or 1.3 percent, at 15,666.44. The Standard & Poor's 500 index fell 25.60 points, or 1.4 percent, to 1,867.61. The Nasdaq composite declined 19.76 points, or 0.4 percent, to 4,506.49.

"The return to a more traditional stimulus from China helped excite many investors," said Jeff Kleintop, chief global investment strategist at Charles Schwab. "But, in fact, this is more likely the start of a longer-term period of volatility."

The three major U.S. indexes have now lost ground six days in a row, with the Dow falling about 1,900 points over that period.

The S&P 500 is down 12 percent from its record close of 2,130.82 on May 21. That puts it in what Wall Street calls a "correction" — a drop of at least 10 percent from its most recent high. It is the S&P's first correction in nearly four years.

The last time the S&P declined six days straight was July 2012.

China, the world's second-largest economy, cut its interest rates for the fifth time in nine months in a renewed effort to shore up growth. The central bank also increased the amount of money available for lending by reducing the reserves banks are required to hold.

A slowdown in China has the potential to significantly crimp demand for oil and other commodities, a ripple effect that could dampen global economic growth.

"The Chinese economy is going to be on this bumpy road for a while, and it will have ebbs and flows that will no doubt have a serious impact on the global economy," said Kamel Mellahi, professor at the Warwick Business School. "What we are seeing now is a dress rehearsal of things to come."

Beyond China, traders are waiting for clarity from the Federal Reserve, which has signaled it could begin raising its key interest rate from near zero for the first time in nearly a decade as early as this year. The Fed isn't expected to deliver a policy update until it wraps up a meeting of policymakers in mid-September.

European markets recovered almost all their losses from Monday's sell-off. Germany's DAX jumped 5 percent, while France's CAC-40 rose 4.1 percent. The FTSE 100 index of leading British shares gained 3.1 percent.

China's central bank took action hours after the country's main stock index closed sharply lower for a fourth day. The Shanghai stock index slumped 7.6 percent, on top of Monday's 8.5 percent loss.

Tokyo's Nikkei 225 also closed lower, sliding 4 percent. But other markets in Asia posted modest recoveries, including Hong Kong and Sydney.

Energy company Pepco Holdings declined the most in the S&P 500 on Tuesday after regulators in Washington rejected its proposed merger with Exelon. Pepco stock shed $4.44, or 16.5 percent, to $22.51.

Best Buy recorded the biggest gain in the index, climbing $3.68, or 12.6 percent, to $32.95, after the home electronics chain reported better-than-expected results for the quarter.

Oil rebounded from its lowest closing level in more than six years. The price of U.S. crude rose $1.07, or 2.8 percent, to $39.31.

U.S. government bond prices fell, pushing up the yield on the 10-year Treasury note to 2.07 percent.
___

AP Business Writer Joe McDonald in Beijing contributed to this story.


-- (c) Associated Press 2015-08-26

[Usernames]

Maybe a relief is in sight, the US markets are indicating a strong opening: http://finance.yahoo.com/

A bummer of an outcome

It was a set up for the retail bumpkins. I watched CNBC last night for the first time in years, and it was all "you can feel the momentum" of the rally. A parade of "experts" telling you to buy this, buy that. And nobody ever holds these clowns accountable. Saw them do this in 2008, too. Saw them do it when the nasdaq bubble burst. Saw them do it every time there is a big selloff. Get retail to buy while the big brokers are hitting the bid all day long. Utterly shameful. Reminds me why I stopped watching this mess almost a decade ago.

[Harsh Jones]

I recall all the long bets people were making on US stocks here over the last couple years.

The US economy is a phony joke and its stock market is a bubble that is imploding. And its not Chinas fault

[Usernames]

I recall all the long bets people were making on US stocks here over the last couple years.

The US economy is a phony joke and its stock market is a bubble that is imploding. And its not Chinas fault

A bit over the top. But some truth. There is a guy here in Thailand, Marc Faber, who understands quite well that government policy and cheerleaders like Krugman are responsible for this six year run of zero percent interest rate insanity, which has inflated stocks to ridiculous levels.

[Harsh Jones]

I recall all the long bets people were making on US stocks here over the last couple years.

The US economy is a phony joke and its stock market is a bubble that is imploding. And its not Chinas fault

A bit over the top. But some truth. There is a guy here in Thailand, Marc Faber, who understands quite well that government policy and cheerleaders like Krugman are responsible for this six year run of zero percent interest rate insanity, which has inflated stocks to ridiculous levels.

Marc Faber is one of the best Austrain investors out there. I've always wanted to meet him in Thailand but he hangs out in CM and i never get out there.

Its just so annoying that the world thinks the US is the best game in town so add some anti China/ Europe propaganda it becomes a self fulfilling prophecy.

Europe is a net creditor with no trade deficit. The US is the biggest debtor in history and has a 50 billion per month trade deficit. Yet king dollar yeeehaww. No.

[F430murci]

I recall all the long bets people were making on US stocks here over the last couple years.

The US economy is a phony joke and its stock market is a bubble that is imploding. And its not Chinas fault

Nah, were good. I was actually hoping it would dip down to 15,000 range because I need to dump so money before the end of the year. We are back up over 551 points today . . . Our markets have actually hedged pretty well considering other markets that usually drive ours. 18,000 is definitely a resistance point at this time. I think it will be 20,000 when next president take over.

Edited August 26, 2015 by F430murci

[F430murci]

I recall all the long bets people were making on US stocks here over the last couple years.

The US economy is a phony joke and its stock market is a bubble that is imploding. And its not Chinas fault

A bit over the top. But some truth. There is a guy here in Thailand, Marc Faber, who understands quite well that government policy and cheerleaders like Krugman are responsible for this six year run of zero percent interest rate insanity, which has inflated stocks to ridiculous levels.

Marc Faber is one of the best Austrain investors out there. I've always wanted to meet him in Thailand but he hangs out in CM and i never get out there.

Its just so annoying that the world thinks the US is the best game in town so add some anti China/ Europe propaganda it becomes a self fulfilling prophecy.

Europe is a net creditor with no trade deficit. The US is the biggest debtor in history and has a 50 billion per month trade deficit. Yet king dollar yeeehaww. No.

Well, if you so on top of the game it seems like you would be wealthy man going short, . . . or are you just another internet taking bs head that predicts and criticizes and sits on a podium without putting anything money where there mouth is.

The US will be fine. Why, because we are some resilient, smart mfers . . .

[Harsh Jones]

I recall all the long bets people were making on US stocks here over the last couple years.

The US economy is a phony joke and its stock market is a bubble that is imploding. And its not Chinas fault

Nah, were good. I was actually hoping it would dip down to 15,000 range because I need to dump so money before the end of the year. We are back up over 551 points today . . . Our markets have actually hedged pretty well considering other markets that usually drive ours. 18,000 is definitely a resistance point at this time. I think it will be 20,000 when next president take over.

The markets in the US may indeed be good. As long as the rest of the world is dumb enough to keep dumping their hard earned money down that rat hole. Which never seems to change.

But then again, so many bimbos on Bloomberg and CNBS are tweeting that the correction is officially over that there must be more downside.

You think your markets are good. How about the Canadian housing market ? Our house prices are still going up even after these new lows in oil. Even Calgary, the heart of oil country's house prices are still going up. As of last month, prices went up.

[Harsh Jones]

I recall all the long bets people were making on US stocks here over the last couple years.

The US economy is a phony joke and its stock market is a bubble that is imploding. And its not Chinas fault

A bit over the top. But some truth. There is a guy here in Thailand, Marc Faber, who understands quite well that government policy and cheerleaders like Krugman are responsible for this six year run of zero percent interest rate insanity, which has inflated stocks to ridiculous levels.

Marc Faber is one of the best Austrain investors out there. I've always wanted to meet him in Thailand but he hangs out in CM and i never get out there.

Its just so annoying that the world thinks the US is the best game in town so add some anti China/ Europe propaganda it becomes a self fulfilling prophecy.

Europe is a net creditor with no trade deficit. The US is the biggest debtor in history and has a 50 billion per month trade deficit. Yet king dollar yeeehaww. No.

Well, if you so on top of the game it seems like you would be wealthy man going short, . . . or are you just another internet taking bs head that predicts and criticizes and sits on a podium without putting anything money where there mouth is.

The US will be fine. Why, because we are some resilient, smart mfers . . .

Medium term, I've been long the Euro for 6 months which paid off in spades over the last few days.

Long gold in CAD and long the Euro is a short the USD trade of sorts. So my money is where my mouth is.

I have no interest in common stocks. ie the DOW or SP.

Its all or nothing for the US. It will be fine until it is not. It is only a question of when. Just like Asia in 1997 when they were the debtors and they were carrying massive trade deficits. Thailand itself was broke long before the Baht crashed. So it stands to reason that the US will follow a similar path.