World markets sneezed again when China coughed. U.S. stocks were down more than two percent in the early afternoon. Fred Katayama reports.
World markets sneezed again when China coughed up a storm. Wall Street plummeting across the board by more than 1-and-a-half percent at the open, then extending those losses after the lunch hour. More than 40 percent of S&P 500 stocks are down more than 20 percent off their peaks. The culprits: China devalued its currency to help boost its exports. And worries over weaker Chinese demand pummeled crude oil prices. Those very same factors drove U.S. stocks down more than ten percent last August, leading some strategists to predict stocks are about to stage another correction. BNY Mellon Wealth management's chief investment officer Leo Grohowski: "There is a direct linkage in terms of this dislocation to what transpired last August. In addition, we have additional geopolitical risk and concerns emanating from the Middle East." Global markets have now fallen for a sixth day. China halted equities trading for the second time this week, sending markets tumbling in Asia and Europe. Investors flocked to safety by buying German and U.S. bonds and the yen. Billionaire investor George Soros told Bloomberg investors should stay cautious because global markets face a crisis. Recon Capital Partners' Kevin Kelly senses fear. SOUNDBITE: KEVIN KELLY, CHIEF INVESTMENT OFFICER, RECON CAPITAL PARTNERS (ENGLISH) SAYING: "There's actually a little bit of fear in the market, especially what's happening overseas." Although market watchers say the fundamentals underlying the U.S. economy such as GDP and earnings are OK, one strategist, S&P Capital IQ's Sam Stovall, warned that fear is hinting that those fundamentals might fade.