News ID: 121931
Published: 1209 GMT July 09, 2015

US stocks plunge amid China stock market crash

US stocks plunge amid China stock market crash

US stocks opened sharply lower on Wednesday as trading on the floor of the New York Stock Exchange was suspended over technical difficulties, and broader concerns about the pace of global growth continued to worry investors.

The S&P 500 opened 16 points, or 0.7 percent lower at 2,066 as investors grappled with a precipitous selloff in Chinese shares, lingering nervousness over Greece and the coming Federal Reserve minutes.

The Dow Jones Industrial Average fell 180 points, or 1 percent, to 17596. The Nasdaq Composite lost 65 points, or 1.3 percent, to 4932.

Concerns about the pace of global growth were sparked earlier Wednesday after the selloff in Chinese stocks spilled over into other markets. China's stock markets have lost around 30 Percent of their value since the middle of June.

Hundreds of Chinese companies halted trading in their stock despite the emergency measures Beijing introduced over the weekend to try and protect investors.

Share prices began collapsing after unrelated changes in banking regulations made investors in the rumor-fueled market suspect the government could withdraw its support.

The plunge in Chinese stocks is concerning for American investors for a few reasons, experts say. It has the potential to lower the pace of global growth, which would weigh on demand for goods and services broadly. At the same time, it could depress earnings for US companies that are closely linked to Chinese economic growth.

“US industrials and materials companies in particular derive a significant share of growth from emerging markets economies broadly, including China,” said Gina Martin Adams, equity strategist at Wells Fargo Securities.

“What’s concerning is that when we look forward, the deterioration in financial markets over the last three weeks [in China] may ultimately feed through to a much slower outlook for earnings growth over the next couple of quarters,” she said.

Separately, trading on the floor of the New York Stock Exchange was suspended due to technical difficulties. The outage, which it reported at 11:32 am local time, wasn’t caused by a cyber attack and attributed it to a “technical issue.”

Buying and selling of NYSE-listed stocks was still taking place on electronic venues, including the NYSE’s Arca exchange.

“We’re currently experiencing a technical issue that we’re working to resolve as quickly as possible,” a representative said. “We are doing our utmost to produce a swift resolution, communicate thoroughly and transparently, and ensure a timely and orderly market reopen.”

   
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