Dow, S&P have worst day in 18 months on China stock slump
The U.S. stock market endured its worst performance in 18 months on Thursday, driven lower by another slump in Chinese shares and heavy selling by technical traders.
The global rout started in China, where sharp declines in energy and property stocks pushed the Shanghai Composite down more than 3 percent.
“The emerging markets really got slammed overnight, and that quickly spread to the rest of the world,” said J.J. Kinahan, chief strategist at TD Ameritrade.
Demand for ultra-safe U.S. government bonds rose, pulling down the yield on the benchmark 10-year Treasury note to 2.07 percent from 2.13 late Wednesday.
Chinese shares have had a wild ride this week and that has raised questions about Beijing’s ability to stabilize the market after the devaluation of China’s currency.
Strategists and traders said the drop in stocks was also tied to programmed selling, which came after the S&P 500 moved below one of its most closely watched indicators, the 200-day moving average.
The year’s biggest winners, many of them Bay Area companies, also were hit hard, possibly a sign that investors feel the seven-year bull market for stocks might be slowing down.