Wall Street heads lower for third day on China woes

GMT 19:12 2015 Friday ,21 August

Arab Today, arab today Wall Street heads lower for third day on China woes

Dow Jones Industrial Average
New York - AFP

US shares headed sharply lower for a third straight day in early trade Friday as China's economic troubles fueled another day of equity selloffs around the globe.

The selling pummeled shares across the board, with tech stocks and those whose fortunes are tied to China hit hardest.

Thirty minutes into trade, the Dow Jones Industrial Average was down 182.83 points (1.08 percent) at 16,807.86, trading at its lowest level in 10 months.

The broad-based S&P 500 dropped 21.15 (1.04 percent) to 2,014.58, while the tech-rich Nasdaq Composite gave up 56.36 (1.16 percent) at 4,821.13.

Investors across Asia, Europe, Africa and the Americas again dumped shares on increased signs of China's economic troubles, which has spurred competitive devaluations in emerging markets and spurred capital flows back to safe havens.

China-sensitive stocks in US markets were some of the largest losers. For the second straight day aircraft maker Boeing, which has boomed on sales to China and other emerging economies, was a top loser in the Dow roster of blue chips.

Boeing shares lost 2.5 percent, taking their three-day loss to more than 7.0 percent.

General Motors, its recent strong growth closely tied to Chinese auto buyers, lost 2.6 percent.

Wynn Resorts, the gaming giant heavily present in Macau, dropped 2.1 percent.

In tech, Alibaba, the Chinese e-commerce giant, was close to its $68 IPO price from September 2014. Shares fell as far as $68.30 before some support kicked in, pushing them back close to $69.75, down 0.8 percent from Thursday.

Apple dropped 2.6 percent, Facebook shed 3.5 percent and Google 2.0 percent.

China was not the only factor for other shares, with concerns that US consumer spending growth is weaker than has been expected.

Entertainment giant Walt Disney, another Dow member, sank for a fourth straight session, losing 1.1 percent on worries over China and of overall industry weaknesses in the United States.

Banks also suffered: Bank of America lost 1.1 percent, Wells Fargo 1.1 percent, and Goldman Sachs 1.4 percent.

Patrick O'Hare of said that underpinning the selloff is investors' losing faith in the ability of central bankers from Beijing to Washington to use monetary policy to stimulate growth.

"The stock market didn't get hit hard like it did yesterday just because of growth concerns. It got hit hard also because it realized the monetary policy it has been idolizing all these years is looking less and less divine by the day."

But O'Hare also pointed to overly high valuations for US shares recently given modest growth prospects in the US economy.

"A market trading at roughly 17.5 times forward 12-month earnings is priced for much better things economically speaking that have yet to avail themselves as the Federal Reserve had hoped they would."

Bond prices were barely lower. The yield on the 10-year US Treasury edged up to 2.08 percent from 2.07 percent, while the 30-year rose to 2.77 percent from 2.75 percent. Bond prices and yields move inversely.

Arab Today, arab today
Arab Today, arab today
arabtoday arabtoday arabtoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabs, Arab, Arab