US stock slump deepens as China woes lead to more selling - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

US stock slump deepens as China woes lead to more selling

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Trader Jeffrey Vazquez works on the floor of the New York Stock Exchange, Thursday, Jan. 7, 2016. U.S. stocks are opening sharply lower as worries intensify about China's economy and dropping oil prices. (AP Photo/Richard Drew) Trader Jeffrey Vazquez works on the floor of the New York Stock Exchange, Thursday, Jan. 7, 2016. U.S. stocks are opening sharply lower as worries intensify about China's economy and dropping oil prices. (AP Photo/Richard Drew)

NEW YORK (AP) — U.S. stocks sank Thursday on spreading fears about the health of China's economy. Technology and financial companies were among the hardest hit.

China's stock market slipped about 7 percent Thursday after the yuan fell to its lowest level against the dollar since March 2011. Trading was automatically suspended as a result. That set off another slump in Asian and European stocks.

The Dow Jones industrial average skidded 308 points, or 1.8 percent, to 16,598 as of 1:23 p.m. Eastern. The Standard & Poor's 500 index lost 38 points, or 1.9 percent, to 1,951. The Nasdaq composite index lost 118 points, or 2.5 percent, to 4,716.

2016 has started with a series of warning signs about China's economy, the second-largest in the world and a major driver of global growth. All 10 of the S&P 500 industrial sectors fell.

Financial stocks slumped. Citigroup gave up $2.09, or 4.2 percent, to $48.03. Apple, the world's largest publicly traded company, dipped 2.8 percent and touched its lowest price since October 2014. Industrial stocks also fell. Aerospace company Boeing lost $4.72, or 3.4 percent, to $134.11 and railroad operator Union Pacific shed $1.24, or 1.7 percent, to $73.59.

Other global markets also lost ground. Germany's DAX slid 2.3 percent, France's CAC 40 gave up 1.7 percent and Britain's FTSE 100 lost 2 percent.

China's stock market has skidded this year as the government prepares to remove measures that were introduced last year to prop up share prices following a meltdown in June. Economic reports caused investors to worry about China's manufacturing and service industries. Thursday's selling was linked to weakness in the yuan, as the government's decision to let the currency get weaker may be a bad sign of weakness in China's economy.

China's market regulators said later Thursday that they will suspend a mechanism that automatically halts trading when stocks fall sharply. The halts, which went into effect at the beginning of the year, were triggered twice this week.

The price of oil continued a protracted slide. U.S. crude dipped 59 cents to $33.37 a barrel in New York. On Wednesday it closed at its lowest price since December 2008. Brent crude, a benchmark for international oils, lost 32 cents to $33.917 a barrel in London.

The price of gold rose 1.5 percent to $1,108.10 an ounce and silver climbed 2.7 percent to $14.35 an ounce. Those prices have been falling for years, but gold prices have recovered recently and are at their highest price in about two months.

The price of copper fell 3.2 percent, however. Copper producer Freeport-McMoRan lost 61 cents, or 9.9 percent, to $5.56. Its stock has plunged 85 percent over the last two years.

Homebuilder KB Home slumped after its fourth-quarter results fell short of Wall Street estimates. The stock declined $1.09, or 9.2 percent, to $10.70.

Some retail stocks performed well. Macy's, which lost about half its value since July, rose 85 cents, or 2.4 percent, to $37 after the company said it will close 40 stores and eliminate more jobs.

Teen retailer Zumiez raised its forecast for the fiscal fourth quarter, and its stock jumped $2.28, or 15.1 percent, to $17.36. Urban Outfitters climbed 62 cents, or 2.8 percent, to $22.54.

The euro rose to $1.0875 from $1.0788. The dollar fell to 117.82 yen from 118.38 yen late Thursday.

Bonds prices rose. The yield on 10-year Treasury bond fell to 2.16 percent from 2.17 percent.

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Marley Jay can be reached at http://twitter.com/MarleyJayAP. His work can be found at http://bigstory.ap.org/journalist/marley-jay.


 

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