World stocks tumble towards worst week of the year
US stocks rout continues for fourth consecutive day
The rout in United States stocks continued for the fourth day on Friday, with the three major indices down more than 1 per cent, as fears of a China-led global slowdown were heightened after grim data overnight.
The Dow Jones Industrial Average and the Standard & Poor's 500 were poised for their sharpest weekly fall since November 2011. The Nasdaq was on track for its steepest weekly fall since August 2011. The Russell 2000 entered correction territory.
The sell-off was broad based as all 10 major S&P sectors were in the red, led by the consumer discretionary sector. Eight of the 10 sectors were down more than 1 per cent.
The CBOE Volatility index, a measure of the premium traders are willing to pay for protection against a drop in the S&P 500, jumped as much as 18.6 per cent to 22.71, a more than six-month high. The index also notched its biggest weekly gain for the year.
Apple fell 3.2 per cent to US$109 as investors continued to fret over its prospects in China, a key growth market for the iPhone maker. The stock was the biggest drag on the S&P and the Nasdaq.
Data from China showed its giant manufacturing sector shrank at the fastest pace since 2009, exacerbating worries about its health. The data comes on the heels of weaker-than-expected economic data in July, the yuan's devaluation this month and a stock market plunge.