New day of carnage for financial markets amid global sell-off
Global markets entered a new day of carnage Monday amid a continuing worldwide sell-off, extending last week's meltdown and stoking new fears over how far financial markets will drop.
The Dow Jones industrial average plummeted more than 1,000 points, or more than 6 percent, at its 9:30 a.m. open, its worst start since the global financial crisis, before recovering to a 600-point loss around 10 a.m. The biggest drop for the Dow, an index of 30 large companies, was 777 points in September 2008.
The dismal opening marked a steep continuation of last week's freefall. The blue-chip index plunged more than 500 points on Friday, capping its worst week since 2011 and entering what Wall Street calls a correction, having fallen 10 percent from its May peak.
The sell-off touched every industry, wiping out gains in rapid order after a year of mostly steady trading. Some of America's biggest companies have shed tens of billions of dollars in market value in only a few days, with no signs of when the bleeding could stop.
The Standard & Poor's 500, a broader look at the market, fell 4 percent, to 1,895. S&P 500 companies lost more than $1 trillion in market value last week.
The Nasdaq Composite, a tech-heavy index, plunged more than 4 percent, to 4,490. Tech giant Apple's shares sunk below $100, before briefly recovering, after having lost more than $50 billion in market value last week. Stocks in Europe and across Asia also plunged.
The stock drop was fueled by what China's state media is already calling "Black Monday," in which markets there recorded their biggest one-day plunge in eight years amid growing fears over an economic slowdown.
On Friday, China reported its worst manufacturing results since the global financial crisis, a new sign of woe for the world's second-largest economy, which surprised investors earlier this month by announcing it would devalue its currency. China's benchmark Shanghai Composite index has fallen by nearly 40 percent since June, after soaring more than 140 percent last year.
China's woes stoked fears over commodities and forced oil prices further down. Brent crude oil, the global benchmark, dropped to about $43.61 a barrel, dropping below the $45 mark for the first time since 2009.
Desire for U.S. Treasury bonds also heated up as investors flocked to safety. Yields for the 10-year bonds dropped below 2 percent for the first time since April.
The turmoil will further dent workers' 401(k) retirement accounts and could affect the Federal Reserve's plans to raise interest rates for the first time in a decade.