Markets Fall In China & Japan, U.S. Indices Could Follow - Markets This Morning

  • Stocks crashed at the open, almost got back the loss, then crashed again at the close.
  • The average share lost nearly 4%.
  • The fall in Chinese markets could be the trigger for weakness today.

Stock Markets See Yet Another Crash - S&P 500 loses 3.94%

Markets Fall In China & Japan, U.S. Indices Could Follow - Markets This Morning

Stocks crashed at the open, the Dow falling 1,000 points within five minutes. Then they recovered, quickly then more slowly, and all looked well as we went to lunch. Then the selling accelerated in the last hour and the closing numbers were all red, red, red. For the day the Dow was off 3.58% or 588.47 to finish at 15,871, the S&P 500 was down 3.94% of 77.67 to finish at 1,893, and the NASDAQ was down 3.82% or 179.79 to finish at 4,526. There was no snap-back rally in the markets as many had expected, following what was the worst week in 4 years from stock markets.

China’s collapse got most of the blame, with the Shanghai index losing 8.5%, the Nikkei 4.61%, the Hang Seng 5.17% and India’s Sensex losing 5.84%. The red ink then went to Europe, where Germany’s DAX was down 4.7%, England’s FTSE was down 4.76% and the French CAC-40 was down 5.35%.

Seen from that perspective Wall Street didn’t do that bad. Especially since about 15% of the U.S. market represents energy stocks, and West Texas Intermediate crude finished at $37.93, Brent North Sea crude finished at $42.38 and natural gas finished at 2.67/mcf

Tech Tries to Come Back

Tech stocks led the comeback during the morning. Apple (NASDAQ:AAPL) CEO Tim Cook tried to calm markets in the morning with an e-mail saying his company continues to do well in China, and for a few hours his stock was actually in the green, but it finally finished at about $104, down 1.68% on the day. (It was even as late as 3:15 PM.) Netflix (NASDAQ:NFLX) was up around noon but wound up losing $6.72 to finish at $97.24. Facebook (NASDAQ:FB) was higher for a few minutes at lunch time but finished down $3.47 to finish at $82.58.

Biotechs had the same kind of day. Celgene (NASDAQ:CELG) was even at lunch but down $4.41 at the close to finish at $114.64. Regeneron (NASDAQ:REGN) had the same kind of action but wound up down $18.40 to finish at $508.78. Allergan (NYSE:AGN) lost $6.32 to finish $292.25.

The Empire of Oil Capitulates

If you went to bed with oil stocks in your portfolio you woke up a lot poorer. Exxon Mobil (NYSE:XOM) finished down $3.42 at $68.71. Pioneer Resources (NYSE:PXD) lost $7.81 and finished at $113.13. EOG Resources (NYSE:EOG)  finished down $5.54 and finished at $69.32. In none of these cases did the morning fightback draw them anywhere close to break-even. It was sell, sell sand sell all day.

Stock experts who formerly talked of bottom fishing in the oils were no longer saying that yesterday, which may be the only bullish signal in the oil market.

What Now, China?

All day long yesterday traders were comparing the present correction to those that have gone before, noting that even the 1987 crash did not portend economic trouble, and that the 1997 “Asian contagion” turned out to be relatively easy to contain. The one year no one wanted to mention was 2008, when markets fell apart. No one expects that to happen this time.

Today’s market will be heavily influenced by what happened in China. As trading closed yesterday, there were rumors that the Chinese central bank might make lending easier. Other traders were thinking that the government’s best move there might be to let this contagion run its course.

Whatever happens there, U.S. traders will take their cues from it, and today's 7.6% fall in China points to more weakness ahead.

Cover image licensed from - Copyright: jjvallee / 123RF Stock Photo

Check our daily stock market news section - Markets This Morning, for a quick round-up of key news and events before the bell.

Show Full Article
5 2
Is this article helpful ?    

The views expressed in the article are of individual authors and are not necessarily supported by Amigobulls.We do not hold any stake in the aforesaid stocks. Please read our detailed disclaimer.

Amigobulls Disclosures & Disclaimers:

This post has been submitted by an independent external contributor. This author may or may not hold any positions in the stocks discussed. Neither Amigobulls, nor any members of its staff hold positions in any of the stocks discussed in this post. Amigobulls has not verified the author’s positions in the stocks discussed, and does not provide any guarantees in this regard. The author may be paid by Amigobulls for this contribution, under the paid contributors program. However, Amigobulls does not guarantee the authenticity or accuracy of the information provided by the author in this post.

The author may not be a qualified investment advisor. The opinions stated in the post should not be treated as investment advice. Buying and selling of securities carries the risk of monetary losses. Readers/Viewers are advised to carry out their own due diligence and consult their investment advisors before making any investment decisions.

Amigobulls does not have any business relationship with any of the companies covered in this post. This post represents the views of the author/contributor and may not reflect the views of Amigobulls.

show more

Comments on this article and AAPL stock

Do share this awesome post