As global selloff deepens, US stock market teeters on edge of collapse
World stock markets continued to plummet Monday, fueled by another
steep decline in Chinese shares and concerns over a marked slowdown in
the world’s second-largest economy and turmoil in emerging market
economies.
The Shanghai Composite Index fell 8.5 percent, its
sharpest fall since February 2007, bringing its losses since June to
nearly 40 percent. Major stock exchanges across Asia followed suit, with
Japan and Hong Kong falling 4.6 percent and 5.2 percent, respectively.
The panic spread to Europe, with the British, German and French indexes
plunging between 4.6 percent and 5.2 percent. Stocks also sank across
the Middle East and in Latin America.
But the meltdown was most
intense in the United States. With pre-market futures for the Dow Jones
Industrial Average down 700 points, the Dow collapsed at the opening
bell, along with the S&P 500 and Nasdaq indexes.
Within four
minutes of the trading start, the Dow had sunk by 1,089 points, or 6.6
percent, the biggest single-day point drop in US history. The Nasdaq
dropped 400 points, or more than 8 percent, and the S&P 500 fell
over 100 points, about 5 percent.
The massive and seemingly
unstoppable wave of selling shocked market experts and commentators and
provoked comparisons to the “Black Monday” trading disaster of 1987,
when the Dow plunged 22 percent in one day. There were many indications
that a full-scale meltdown was in progress.
