After historic 1,000-point plunge, Dow dives 588 points at close; Europe bourses fall

A trader works on the floor of the New York Stock Exchange on Monday. Wall Street opened sharply lower on Monday with the Dow Jones industrial average losing more than a 1,000 points following a more-than 8 per cent drop in Chinese shares and a sello
A trader works on the floor of the New York Stock Exchange on Monday. Wall Street opened sharply lower on Monday with the Dow Jones industrial average losing more than a 1,000 points following a more-than 8 per cent drop in Chinese shares and a selloff in oil and other commodities. PHOTO: REUTERS

NEW YORK (AFP) - All eyes are on the Asian markets on Tuesday (Aug 25) following a bruising day in global financial markets sparked by mounting worries over the Chinese economy.

US stocks finished sharply lower on Monday, but far above the session's floor. The broad-based S&P 500 tumbled 77.68 points (3.94 per cent) to 1,893.21, pushing the index into "correction" territory, normally defined as a loss of 10 per cent or more.

The Dow Jones Industrial Average dropped 588.47 (3.58 per cent) to 15,871.28, while the tech-rich Nasdaq Composite Index shed 179.79 (3.82 per cent) at 4,526.25.

 

US stocks were in the red all day after the latest plunge in the Shanghai equity index ignited another round of turmoil in

 

global equity markets.

Bourses in England, France and Germany all fell at least 4.5 per cent.

But the main Wall Street indices finished well above their lows for the session. The Dow fell more than 1,000 points, or six per cent, after the opening bell, but soon recovered some of those losses. The Nasdaq was down more than 9.0 per cent at one point.

A short-lived rebound toward break-even territory came after Tim Cook, the chief executive of Apple, wrote an open letter to CNBC saying the world's most valuable company was still confident in the key Chinese market.

"I can tell you that we have continued to experience strong growth for our business in China through July and August," he said.

Apple shares, which had fallen as much as 12 per cent in early trade, rebounded back to positive territory,but then eased again to close down 2.5 per cent at US$103.15 (S$146.51), pulling the major indices with them.

US stocks have now dropped five straight days, but analysts warned of more turmoil possibly ahead.

"The only thing that's guaranteed for the next few days is volatility, whether it's to the upside or downside," said Michael James, managing director of equity trading at Wedbush Securities.