NEW YORK: Nervous investors sold down US stocks on Monday after surviving last week’s turbulence, amid continued worries over the potential broader impact of China’s slowdown.
Caution was warranted as the Tokyo and Shanghai exchanges fell again and Europe’s major bourses also sagged, with the exception of London, closed for a banking holiday.
After trading lower all day, the Dow Jones Industrial Average finished down 114.98 points (0.69 per cent) at 16,528.03. The broader S&P 500 lost 16.69 points (0.84 per cent) at 1,972.18, and the Nasdaq Composite gave up 51.82 points (1.07 per cent) at 4,776.51.
There was little concrete news to drive trade; the weekend’s central banking conference in Jackson Hole, Wyoming, shed no light on whether the Federal Reserve was likely to begin raising interest rates in September.
Analysts said the markets were still not free of the turbulence that sparked huge selloffs across the world, and sometimes nearly as sharp recoveries, last week.
“The downside risks for most commodity prices, exchange rates, and stock markets are likely to persist for some time, while growth in many parts of the world, especially in emerging markets, is likely to deteriorate further,” said Nariman Behravesh of IHS.
“On the other hand, with market valuations now much lower than recent peaks, the equity markets in the developed world are likely to come under much less pressure. This is especially true of the US economy, where fundamentals remain strong.”
Even so, quipped Bill Lynch of Hinsdale Associates, “it’s a safe bet to say it can’t be any more volatile than last week!”
