US stock market ends its worst week since 2011

January 09 20:01 2016

Fears of a bigger-than-expected slowdown in the world’s second-biggest economy are on the rise, which is a negative for markets as China has been one of the world’s biggest drivers of growth in recent years.

Ongoing concerns over China’s slowing economy and falling currency are behind the wild market gyrations.

Trading on the mainland Chinese markets were suspended on Thursday after shares plunged more than 7% for the second time this week.

“It seems to me that the Chinese stock market is a complete different animal than the US stock market”.

Spot gold XAU= fell for the first time this week but gained more than 4 percent for the week, the most for any week since August. The monthly average is seen as a more accurate predictor of labor-market trends.

Shares of Qorvo, were down six per cent at $US42.90, a day after the Apple supplier cut its revenue estimate for the third quarter.

“When you have a market that begins a year with weakness, people are sort of suspect anyway”. The S&P 500 is down 4.9 percent since December 31, its worst four-day opening in its history, according to S&P Dow Jones Indices, while the Nasdaq is down 6.4 percent. The Nasdaq composite fell 89 points, or 1.9 percent, to 4,746.

The index opened sharply lower in the morning, before staying in positive terrain.

The Dow Jones Industrial Average careened into the close on Friday, finishing down 169 points, or 1 per cent, at 16346.

European markets also dropped. AbbVie fell $1.28, or 2.2 percent, to $55.93 and Endo International shed $1.99, or 3.5 percent, to $54.37.

Meanwhile, crude oil futures fell by up to 5.5% to just above US$32 per barrel, the lowest in more than a decade. It has been trading at 11-year lows. Apple, the world’s largest publicly traded company, dipped 1 percent and touched its lowest price since October 2014. The Nasdaq, down over 6% in 2016, is off to its bleakest start since 2000. “If the China market goes down today it has nothing to do with what we think our companies are going to be worth in five years”.

Thursday’s selling came after the Chinese government allowed its currency to weaken against the dollar in a reflection of sluggishness in the country’s giant economy. Earlier this week, economic data caused investors to worry about China’s manufacturing and service industries.

No. 1 automaker Hyundai Motor dropped 0.73 percent to end at 136,500 won, and its smaller affiliate Kia Motors declined 1.62 percent to end at 48,500 won.

The global panic attack is being fueled by fears about China and the intensifying plunge in crude oil prices. The energy index, down 1.09 per cent, was the lone decliner among the major S&P sectors.

Nervous investors sought to lessen their exposure ahead of U.S. jobs data and a three-day weekend in Japan.

The price of copper fell 2 percent, however. Freeport-McMoRan lost 38 cents, or 6.2 percent, to $5.79.

Chinese stocks started the year with an epic 12% nosedive.

“There is a wall of worry under full construction brought on by China, fall in oil prices and uncertainty regarding quarterly earnings”, said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis.

China's market turmoil Worry but don't panic

US stock market ends its worst week since 2011
 
 
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