LiveWall Street finishes weaker after China rate cut fails to calm nerves

US stocks ended down on Tuesday after sharply reversing early gains late in the session as investors were unconvinced China’s move to cut interest rates and banks’ reserve requirements could ease global growth concerns.

The dollar also gave up much of its gains from earlier in the day. Wall Street trading was volatile and the S&P 500 ended down 1.4 per cent after a late selloff following a gain of as much as 2.9 per cent earlier in the day.

Global stocks, oil and currencies initially appeared to recover after markets were pummeled on Monday when Chinese shares fell almost 9 per cent. Beijing heeded investor calls for intervention after the Shanghai Composite Index slumped again on Tuesday, but the index still ended down 7.6 per cent.

After Monday’s Wall Street selloff - its steepest in four years - some investors bought on the dip. But others did not want to hold stocks overnight for fear of bad news from China.

"You didn’t have the snap back you would have expected to reverse a move like yesterday’s. People are still nervous about overseas and what might happen tonight. Nobody wants to sit around and see what happens," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. "Our fundamentals are not nearly as bad as those in China, so it would be logical to see us rally. But we’re still beholden to events in China."

The Dow Jones industrial average fell 204.91 points, or 1.29 per cent, to 15,666.44, the S&P 500 lost 25.59 points, or 1.35 per cent, to 1,867.62 and the Nasdaq Composite dropped 19.76 points, or 0.44 per cent, to 4,506.49.