US Markets Nosedive On China Jitters; Dow Plunges 530 Pts

Wall Street sees its steepest one-day drop in nearly four years, Dow falls more than 10% below a May record

Wall Street’s selloff this week leaves investors jittery (Photo: Reuters)

Fears of a China-led global economic slowdown drove Wall Street to its steepest one-day drop in nearly four years on Friday and left the Dow industrials more than 10% below a May record.

Wall Street’s selloff this week suggested investors are growing nervous about paying high prices for stocks at a time of minimal earnings growth, tumbling energy prices and an expected rate hike by the US Federal Reserve that could gradually usher the end of almost a decade of easy money.

Weak Chinese manufacturing data on Friday, and another drop in China’s stock market, rattled investors’ nerves and led to Friday’s tumble.

You’re definitely witnessing a perfect storm in terms of China timing, people on vacation that affects liquidity, and you’ve got a lot of questions on the Fed and people are obviously focused on oil. If you’re buying a stock, you’re dipping a toe in here.
–Andrew Frankel, Stuart Frankel

The Dow Jones closed down 530.94 points, or 3.12%, to 16,459.75, the S&P 500 lost 64.84 points, or 3.19%, to 1,970.89 and the Nasdaq Composite 171.45 points, or 3.52%, to 4,706.04.

The S&P slumped 5.8% for the week, its biggest weekly decline since September 2011. The index lost more than $1 trillion of its value this week, according to S&P Dow Jones Indexes. Only 10 S&P 500 components advanced on Friday.

(With inputs from Reuters)