Global Markets Dive Again, U.S. Indexes in Correction Phase Again

Nichole Harper
01 Sep, 2015
New York City

Global markets selloff began in Asia and quickly traveled to Europe and New York with major market indexes falling between 2% and 4%. S&P 500, Tollbooth and Dow reentered corrective phase as indexes resume downward spiral in September.

[R]1:15 PM New York City, New York – Global markets selloff began in Asia and quickly traveled to Europe and New York with major market indexes falling between 2% and 4%. S&P 500, Tollbooth and Dow reentered corrective phase as indexes resume downward spiral in September.[/R]

Market indexes on Wall Street had another violent downward draft and investors were reminded of August month sell off.

Tollbooth Strategy Index, S&P 500 index and the Dow Jones dropped more than 6% in the month of August but indexes had stabilized in the last three days.

However, the sharp decline in market indexes continued today following the market sell off in Asia after China reported weaker than expected manufacturing growth.

The latest market jitters on Wall Street are more related to the stretched valuations and the ongoing uncertainties related to the first rate hike by the Fed after nearly a decade and has less to do with the Chinese economic data.

Indexes on Wall Street dropped more than 2% and in Europe declined between 2% and 3%. Nikkei in Japan plunged nearly 4% and indexes in India and Hong Kong fell 2% and in Shanghai declined 1.2%.

Crude oil priced swung wildly lower and plunged as much as 7% in New York and in London trading.

Construction spending in July increased 0.7% at annual rate of $1,083.4 billion from the revised June estimate of $1,075.9 billion and soared 13.7% from a year ago spending of $952.5 billion, the Department of Commerce said.

On Wall Street, Tollbooth Strategy Index dropped 193.37 or 1.9% to 10,148.72.

S&P 500 index declined 44.81 or 2.3% to 1,927.41 and the Nasdaq Composite Index slumped 93.83 or 1.9% to 4,682.86.

Crude oil in New York declined $3.01 to $46.19 a barrel and gold jumped 6.30 cents to $1,138.80 an ounce.

U.S. Movers

Ford Motor Company ((F)) rose 5 cents to $13.93 after the auto maker said total U.S. sales in August soared 5.4% to 234,237 vehicles and Ford brand sales soared 5.4% to 225,601 vehicles and Lincoln sales jumped 6% to 8,636 vehicles.

Fiat Chrysler Automobiles NV ((FCAU)) dropped 2.9% or 41 cents to $13.72 after the passenger cars maker said total U.S. vehicle sales in August increased 2% to 201,672 units from 198,379 units in a year ago month.

Total car sales in the month declined 10% to 38,504 units while truck sales jumped 5% to 163,168 units from a year ago period. Jeep Brand sales soared 18% to 80,804 units and Ram Truck brand sales increased 6% to 49,439 units.

Chrysler brand declined 14% to 25,580 units and Dodge brand sales also tumbled 15% to 42,386 units.

General Motors Company ((GM)) slumped 2.1% or 63 cents to $28.81 after the auto maker reported total vehicle sales in the U.S. in August fell 0.7% to 270,480 units from 272,423 units in the same month a year ago.

GM said Chevrolet pickup sales in the month surged 26% and retail sales jumped 6% but fleet sales plunged 24% and rental deliveries tumbled 38%.

European Markets

European markets plunged more than 2% after China reported lowest manufacturing data in three years.

Markets in Asia and Europe accelerated decline on the growing worries that the Chinese economy may be slowing faster than the economic data suggest.

Seasonally adjusted jobless rate in the euro zone in July fell 10.9% from June and from 11.6% from a year ago month.

The jobless rate in the wider region of EU28 slid to 9.5% from June and from 10.2% in July 2014, the Statistical Office of the European Communities said.

In London trading, FTSE 100 index declined 151.56 or 2.4% to 6,096.38 and in Frankfurt the DAX index dropped 253.28 or 2.5% to 10,006.18.

In Paris, CAC 40 index slumped 107.92 or 2.3% to 4,545.03.

AGA Rangemaster Group Plc soared 11.9% to 205 pence after the U.K.-based kitchen appliances maker said it was approached by the U.S.-based home appliances maker Whirlpool Corporation for a possible offer of about £129 million or $198 million in cash.

Innovation Group Plc jumped 2.6% to 39.75 pence after the U.K.-based enterprise software services provider agreed on a takeover offer from private equity group Carlyle Group for about £499 million.

Shareholders of Innovation are entitled to receive 40 pence in cash per share, a premium of 13.5% to the closing price of August 27.

Asian Markets

Nikkei index plunged following Asia-wide decline after the latest manufacturing data in China showed slowing manufacturing sector and domestic capital spending declined.

The official gauge of manufacturing activities in August in China declined to a 3-year low and private surveys also confirmed the slowdown in service sector.

On the economic front, capital spending in the second-quarter declined 5.6% compared to 7.3% in the first-quarter, The Ministry of Finance said.

The Nikkei 225 Stock Average plunged 724.79 or 3.8% to 18,165.69 and the broader Topix index dropped 58.94 or 3.8% to 1,478.11.

The yen strengthened to 121.03 against a dollar.

Toshiba Corporation declined 5.3% to 363.50 yen after the electronics products maker delayed the release of revised statements for fiscal year ending in March 2014 for the second time after new claims of 10 new cases of improper accounting errors were discovered.

Stocks in Mumbai traded sharply lower at the opening and declined more in the late afternoon trading after European indexes opened down 2%.

Sensex in Mumbai and Asian indexes opened lower after manufacturing index showed larger than expected weakness and service sector also weakened in the latest economic data.

The latest market selloff in Mumbai was driven by the volatile markets in Asia and China. Moreover, the latest domestic GDP data was tad softer than estimated.

Foreign investors led the market selloff in Mumbai but domestic investors focused on the latest quarter which is expected to benefit from the rising government spending in the period.

Rupee strengthened 27 paisa to 66.21 against one U.S. dollar.

The Sensex Index plunged 586.65 or 2.2% to close at 25,696.44. The CNX Nifty dropped 185.45 or 2.3% to 7,785.85.

State-controlled oil retailers and refiners traded lower after HPCL and Indian Oil lowered prices of petrol by ₹2 and diesel by 50 paisa per litre.

Maruti Suzuki, the largest auto maker in India said August total sales increased 6% but Mahindra & Mahindra, the largest maker of tractors said total sales declined 22%.

Sun Pharma, the largest generic pharmaceuticals maker in India acquired opiates business in Australia from Glaxo.

Petronet is looking to raise $155 million through a bond offering.