US stocks Monday followed global markets lower on concerns about the Chinese economy and tight liquidity in the world’s second-biggest economy.
Five minutes into trade, the Dow Jones Industrial Average tumbled 133.91 (0.90 percent) to 14,665.49
The broad-based S&P 500 sank 19.46 (1.22 percent) to 1,572.97, while the tech-rich Nasdaq Composite Index dropped 39.00 (1.16 percent) to 3,318.248
The decline in US stocks followed even steeper declines in many international markets.
Britain’s FTSE 100 plummeted 1.9 percent, the German DAX was off 1.2 percent and the French CAC 40 fell 1.9 percent.
Markets in Asia were also down, including China’s Shanghai Composite, which tumbled after the People’s Bank of China signaled it would not take additional steps to increase liquidity despite tightening credit markets.
“Note that even if the government is right and the activities of the shadow banking system are nothing short of the most rank and improper speculation, starving them for credit is nonetheless a dramatic monetary tightening,” Chris Low, chief economist for FTN Financial, said of the Chinese policy.
Briefing.com analyst Patrick O’Hare noted that Goldman Sachs slashed its 2013 growth forecast for the Chinese economy from 7.8 percent to 7.4 percent.
“Capital markets have grown agitated of late over the thought that central banks are transitioning to a position of being less accommodative,” said O’Hare. “That doesn’t necessarily mean that they will do less, it’s just that they are sending signals that they are growing increasingly reluctant to do more.”
US stocks down as China economic fears mount
