WASHINGTON, Jan. 4 (UPI) — The Dow Jones Industrial Average dropped 450 points on Monday, falling below the 17,000 level as it is on track to becoming the worst trading day opening since 1932.
As of midday trading, Dow Jones fell by more than 2 percent, the S&P 500 Index fell about 2 percent and the NASDAQ dropped 3 percent. The U.S. market’s overall drop follows a global trend after China used its “circuit breaker” stock policy to halt trading.
“It seems like fear woke up early in 2016 and hope is basically sleeping in,” David Kelly, chief global strategist at JPMorgan Funds, told CNN Money.
Global manufacturing underperformed when compared to previous estimates, with the U.S. December ISM Manufacturing Index falling to 48.2, below expectations and down from November’s 48.6, CNBC reported.
China halted trading through its circuit-breaker system on Monday after a 7 percent drop in the CSI 300, a benchmark of the largest 300 stocks listed in Shanghai and Shenzhen. The drop is attributed to underwhelming manufacturing data pointing to shrinking factory activity and a falling currency.
The consequences of China’s decision were felt across global markets, with Asian and European indexes falling significantly.
Kelly said Monday’s crash in China was created by fears about the circuit-breaker introduction, likening the move to a bank saying only the first 10,000 customers will be served.
“Everybody wants their money before it shuts,” Kelly said.
