Stocks get pummeled and close down more than ten percent from 52-week highs on worries about China. Jeanne Yurman reports.
A massive sell-off drove the Dow to shed more than 1,000 points at the day's low. A bounce back by Apple helped cut the losses but it still closed with the steepest drop in four years. Sparking the plunge: a further fall in Chinese equities and commodity prices. Manhattan Venture Partners' Max Wolff: SOUNDBITE: MAX WOLFF, CHIEF ECONOMIST, MANHATTAN VENTURE PARTNERS (ENGLISH) SAYING: "I think, the bloom has sort of come off the rose on this long run up, which we knew was going to come, but it came fast and furious, which always is a little bit of a severity makes it a feel worse story." The pullback in oil prices slammed energy stocks, such as ExxonMobil, Chevron and Cabot Oil. Traders now see less of a chance that the Fed will raise interest rates in September, so investors unloaded financial stocks like JPMorgan Chase and Morgan Stanley. That view also pushed the dollar down and Treasury yields below two percent. Chinese shares trading in the U.S. also got hit. Alibaba's shares fell to below its IPO price of $68 a share. That yanked down Yahoo as well, which has a stake in Alibaba. Netflix said, it's partnering with Softbank to launch its video streaming service in Japan next month. But its shares couldn't avoid the sell-off. In Europe, stocks posted an even steeper drop than in the U.S. with oil and gas shares taking the biggest hit.