Date
22 October 2017
Wall Street traders react to Tuesday's wild ride. Stocks slumped near the close, wiping out intraday gains of as much as 3 percent. Photo: Reuters
Wall Street traders react to Tuesday's wild ride. Stocks slumped near the close, wiping out intraday gains of as much as 3 percent. Photo: Reuters

Wall Street rally fizzles as China worries prevail

China’s imploding equity market spooked Wall Street again Tuesday, halting a rally in US stocks and turning sharp gains into deep losses.   

Major indices turned negative in the final minutes of trading after previously climbing almost 3 percent.

Investors cited more worries that a slowdown in China could hobble global growth, even after the central bank cut interest rates on Tuesday for the second time in two months, Reuters reports.

The move came after Chinese stocks slumped 8 percent on Tuesday after an 8.5 percent drop on Monday.

“People are still nervous about overseas and what might happen tonight. Nobody wants to sit around and see what happens,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

Tuesday’s drop followed steeper losses on Monday when the Dow Jones industrial average fell more than 1,000 points at its lows and the S&P 500 recorded its worst day since 2011.

In the past week, the S&P has lost 11 percent.

“Investors are still concerned about exogenous growth and shifting Fed policy, and both of those are still on the table,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

The Dow Jones industrial average fell 204.91 points, or 1.29 percent, to end at 15,666.44.

The S&P 500 lost 25.59 points, or 1.35 percent, to finish at 1,867.62 and the Nasdaq Composite dropped 19.76 points, or 0.44 percent, to 4,506.49.

Earlier, the S&P rose as much 2.9 percent, the Dow as much as 2.8 percent and the Nasdaq as much as 3.6 percent.

Meanwhole, European shares rebounded sharply from the previous session’s slump, according to the Wall Street Journal .

The Stoxx Europe 600 index closed 4.2 percent higher, its biggest one-day gain since September 2011.

Germany’s DAX rose 5 percent, France’s CAC 40 climbed 4.1 percent, and Britain’s FTSE 100 was 3.1 percent higher.

“I suspect things will calm down in the short term,” said Guy Foster, head of research at wealth manager Brewin Dolphin.

Some investors went bargain hunting in the wreckage of the stock market sell-off.

Some stocks that had suffered big declines in recent weeks were able to eke out gains on Tuesday.

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CG/RA

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