US stocks see biggest slump in 4 months amid fears over China’s Evergrande
- Worries over Chinese property developers recently centred on the real estate giant, which looks like it may be unable to repay its debts
- Investors are also concerned that the US Federal Reserve could signal this week that it’s planning to pull back some of its support measures
Stocks on Wall Street closed sharply lower on Monday, mirroring losses overseas and handing the S&P 500 index its biggest drop in four months.
Worries about debt-engorged Chinese property developers – and the damage they could do to investors worldwide if they default – rippled across markets. Investors are also concerned that the US Federal Reserve could signal this week that it is planning to pull back some of the support measures it’s been giving markets and the economy.
The S&P 500 fell 75.26 points, or 1.7 per cent, to 4,357.73, it’s biggest drop since May. At one point, the benchmark index was down 2.9 per cent, the biggest decline since last October. The S&P 500 was coming off two weeks of losses and is on track for its first monthly decline since January. The S&P 500 has gone an unusually long time without a pullback of 5 per cent or more.
The Dow Jones Industrial Average fell 614.41 points, or 1.8 per cent, to 33,970.47. The blue-chip index was briefly down 971 points. The Nasdaq fell 330.06 points, or 2.2 per cent, to 14,713.90. The Hang Seng, Hong Kong’s main index, dropped 3.3 per cent for its biggest loss since July. European markets fell about 2 per cent.
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Angry protest at headquarters of China Evergrande as property giant faces liquidity crunch
“What’s happened here is that the list of risks has finally become to big to ignore,” said Michael Arone, chief investment strategist at State Street Global Advisers. “There’s just a lot of uncertainty at a seasonally challenging time for markets.”