US stocks fall after sell-off in Asia
NEW YORK – A sharp drop in Asian markets has set off a wave of selling in U.S. stocks.
Major stock indicators fell about 1 percent in midday trading Monday after a 6.7 percent decline in China's main index. The biggest losses were in energy and material stocks, as prices for commodities like crude and copper plunged.
The selling of Chinese shares has been fed by concerns over a tightening in bank lending that could hurt that country's economy. Commodities rely on a robust Chinese economy to drive demand.
"As China goes, so goes a lot of the rest of the world," said Brian Nick, investment strategist at Barclays Wealth.
The selloff in China rattled investors who were already on edge going in to the last trading day of August. With stocks up more than 45 percent over the past six months, investors are increasingly worried that the market may have gotten too far ahead of the economy. Key reports later this week on manufacturing and employment in August could either upset the market's six-month rally or help push it forward.
Without evidence of actual economic growth, analysts have warned that the market's rally could fizzle in the coming weeks, especially as traders head into September, historically a rough month for the stock market.
"There's enough jitteriness to set the stage for a decline," said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors. "The economic numbers could neutralize the nervousness, could putportfolio managers' worries to rest."
Two big deals between The Walt Disney Co. and Marvel Entertainment Inc. and oilfield services companiesBaker Hughes Inc. and BJ Services Co. did little to support the market.
The Dow Jones industrial average fell 83.59, or 0.9 percent, to 9,460.61. The Standard & Poor's 500 index fell 11.16, or 1.1 percent, to 1,017.77, while the Nasdaq composite index fell 24.79, or 1.2 percent, to 2,003.98.
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