Broad Sell-off on Wall Street and in Europe, Nasdaq Down 3%

Nichole Harper
28 Sep, 2015
New York City

Indexes on Wall Street plunged as much as nearly 3% after rattled investors took the latest decline in profit at Chinese industrial companies an opportunity to sell stocks. U.S. pending home sales index declined 1.4% in August. Healthcare stocks lead the decliners as politician toughen rhetoric.

[R]4:00 PM New York City, New York – Market indexes on Wall Street plunged as much as nearly 3% after rattled investors took the latest decline in profit at Chinese industrial companies an opportunity to sell stocks. U.S. pending home sales index declined 1.4% in August.[/R]

Stocks in New York accelerated decline in the afternoon trading after opening lower.

Investors looked for reasons to sell and found one in the latest data from China. Industrial companies’ profits declined 8.8% and giving another push down to energy prices.

The endless debate on the next U.S. Fed rate move reached to a new pitch after August month consumer spending rose more than expected.

August personal income increased 0.3% and disposable personal income rose 0.4%. Personal consumption expenditure grew 0.4% in the month.

In July personal income jumped 0.5%, disposable personal income increased 0.5% and personal consumption expenditure gained 0.4% on the revised estimate, the U.S. Department of Commerce reported.

On Wall Street, Tollbooth Strategy Index dropped 194.05 or 1.9% to 10,085.02.

S&P 500 index declined 40.94 or 2.1% to 1,890.36 and the Nasdaq Composite Index slumped 116.46 or 2.5% to 4,569.79.

Crude oil in New York dropped $1.10 to $44.60 a barrel and gold plunged $11.60 to $1,134 an ounce.

U.S. Movers

Alcoa Inc ((AA)) jumped 4.6% or 41 cents to $9.48 after the aluminium producer said it will split into two publicly traded companies; the struggling aluminium smelting operations and faster-growing lightweight metal producers for aerospace and automotive business.

The transaction is expected to close in the second-half fiscal 2016.

Chief Executive Officer Klaus Kleinfeld will become the chief executive officer of the new unnamed company.

Apple Inc ((AAPL)) slipped $1.10 to $113.61 after the mobile and electronic products maker said it sold more than 13 million iPhone 6s and iPhone 6s Plus models in the first three days of launch since Sept 25.

Williams Companies Inc WMB)) plunged 9.7% or $4.04 to $37.56 after the energy infrastructure developer agreed to be acquired by Energy Transfer Equity LP for about $37.7 billion in a stock-and-cash deal, including debt, three months after it rebuffed Energy Transfer''s $53.1 billion offer.

Under the terms of the transaction, Energy Transfer Corp LP will acquire Williams at an implied current price of $43.50 per Williams share.

The transaction is expected to close in the first-half of 2016.

Energy Transfer Equity LP stock tumbled 9.3% to $21.07.

Separately, today the company signed a termination agreement with Williams Partners L.P. from the previously announced merger agreement and agreed to pay a termination fee of about $428 million.

European Markets

In London trading, FTSE 100 index declined 139.53 or 2.3% to 5,969.48 and in Frankfurt the DAX index dropped 196.04 or 2% to 9,492.06.

In Paris, CAC 40 index slumped 130.54 or 2.9% to 4,350.12.

Anheuser Busch Inbev SA fell 0.6% to €96.63 after the Sunday Times reported Belgium-based brewing company plans make an open offer to the U.K.-based SABMiller for about $106 billion.

SABMiller Plc stock jumped 2.1% to 3,663 pence.

UniCredit SpA declined 3.9% to €5.43 after Italy-based financial services provider said agreed to divest its non-performing Italian corporate and consumer loans business for about €1.2 billion or $1.3 billion to private equity group AnaCap Financial Partners LLP.

Asian Markets

Nikkei average in Tokyo dropped 1.3% and the yen traded above 120-mark against the U.S. dollar.

Stocks in Tokyo traded lower after China said industrial companies’ profits slid and weak market conditions in New York and in Europe in Friday’s trading.

The Nikkei 225 Stock Average slumped 235.40 or 1.3% to 17,645.11 and the broader Topix index dropped 15.14 or 1% to 1,438.67.

The yen strengthened to 120.10 against a dollar.

The broader Topix index declined for the sixth time in the seven weeks after more than half the companies in the widely followed index traded ex-dividend.

Suzuki Motor Corp slipped 1.9% to 3.693 yen after the auto maker agreed to sell 4.40 million shares or 1.5% stake in Germany-based Volkswagen AG to Porsche Automobil Holding SE and will book profit of about 36.7 billion yen from the sale.

The auto maker did not disclose the sale price.

Stocks in Mumbai opened lower after a 3-day holiday and market indexes traded lower after China reported a sharp decline in profit at industrial companies.

In cautious trading ahead of the policy meeting by the Reserve Bank of India on Tuesday, rate sensitive stocks led the decliners.

The central bank is expected to keep rates on hold at it fourth bi-monthly meeting of the year and focus on exports slowdown linked to the current global markets weakness.

The fertilizer stocks jumped between 4% and 13% after the central government said it is planning to waive debt of $83 million to fertilizers and chemicals companies.

Rupee strengthen 12 paisa to 66.03 against one U.S. dollar.

The Sensex Index dropped 246.66 or 0.9% to close at 25,616.84. The CNX Nifty slipped 72.80 or 0.9% to 7,795.70.

Petronet LNG prepares for $160 million bond offering.