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US stocks plunge following global selloff | Canindia News

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US stocks plunge following global selloff

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CanIndia New Wire Service 0 comments

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New York, Jan 5 (IANS) The US stocks traded sharply lower in the morning session on Monday, the first trading day of 2016, amid global market rout and geopolitical tensions between Iran and Saudi Arabia.

At midday, the Dow Jones Industrial Average plunged 423.64 points, or 2.43 percent, to 17,001.39. The S&P 500 dove 47.12 points, or 2.31 percent, to 1,996.82. The Nasdaq Composite Index plummetted 136.01 points, or 2.72 percent, to 4,871.40 points, Xinhua news agency reported.

China’s shares tumbled 7 percent on Monday, triggering the new “circuit breaker” mechanism, as the Caixin General China Manufacturing Purchasing Managers’ Index (PMI) is the 10th month in a row below the 50-point level which demarcates contraction and expansion.

Tokyo stocks also plunged on the first trading day of the year as below-par manufacturing data from China compounded a dour market mood, with sentiment initially dashed by Wall Street’s slump at the end of last year.

The US stocks continued to fall following volatile session on Thursday, the last trading day of 2015, as investors digested the worse-than-expected initial jobless claims.

Saudi Arabia cut off diplomatic ties with Iran over the weekend and asked all Iranian diplomats to leave the country within 48 hours.

Analysts said the heightened geopolitical tensions in the Middle East sent traders scurrying from stocks to safe haven assets.

On the economic front, the US December ISM manufacturing Index was 48.2, below market expectations and down from November’s 48.6 points.

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