China rout spooks Wall Street, Dow down 2% at open

Wall Street opened with a 2.1 per cent drop on Jan 4, 2015, after Chinese stocks took a tumble earlier in the day.
Wall Street opened with a 2.1 per cent drop on Jan 4, 2015, after Chinese stocks took a tumble earlier in the day.PHOTO: BLOOMBERG

WASHINGTON (REUTERS) - Wall Street started 2016 on a dour note after weak Chinese economic data reignited fears of global growth and sparked a selloff in stock markets across the world.

Mainland Chinese shares fell 7 per cent on Monday, triggering a new circuit breaker that prompted a trading halt, after surveys showed factory activity at the world's second-largest economy shrank sharply in December.

Adding to the investors' worries, China's central bank fixed the yuan at a 4-1/2 year low. "Those are violent New Year fireworks. That's quite a way to start the day off," said Andre Bakhos, managing director at Janlyn Capital LLC in Bernardsville, New Jersey. "Right now, the focal point is China, the global economic condition, and the fact that we're coming off a disappointing year on many levels, a frustrating year on many levels, only to walk in and have the (S&P) futures down 35 points," he said.

US stocks tumbled in opening trade Monday. Ten minutes into trade in the first session of 2016, the Dow Jones Industrial Average was down 2.1 percent, the S&P 500 2.0 percent and the Nasdaq Composite Index 2.4 per cent.