Stocks in the United States tumbled Monday with the markets see-sawing much of the day in a session dominated by global concerns.
Immediately after the opening bell in New York, the Dow Jones industrial average dropped more than 1,000 points, or more than 5 percent - one of the most precipitous such plunges in recent years.
The indexes had pared back much of their early losses in midday but continued the fall in afternoon trading with the Dow down more than 500 points, or 4 percent, from the lows reached Friday. Trading remained volatile throughout the day.
Investors’ concerns over China’s economic slowdown and a souring view of emerging economies have rattled financial markets around the world in recent days and showed no signs of letting up.
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“There was a huge amount of negative sentiment built in this morning,” said Dan Greenhaus, the chief global strategist at BTIG.
Greenhaus said many investors ended last week hoping that the Chinese government would step in during the weekend to announce some steps to support the markets, but nothing significant was announced, contributing to the pessimism Monday morning.
The negative sentiment led to the big market drops in early trading Monday, with the S&P 500 initially down over 5 percent and the Nasdaq down more than 8 percent. The bounce back from those early lows suggested that at least some investors are becoming convinced that the panic has gone too far.
Ryan Larson, the head stock trader at RBC Global Asset Management, said that after the initial market declines clients were canceling their sell orders and putting in requests to buy stocks.
“People just realized, ‘This is a little stupid, and there are some great opportunities,’” Larson said. While some U.S. companies may be hit by the weakness in the emerging markets, recent data has suggested that the U.S. economy is continuing to strengthen.
Many analysts have said that a correction to stock market valuations was overdue after a long bull market. And it is too early to say how the financial market slump will affect the underlying global economy where goods and services are actually produced and consumed.