US stocks drop on worries about China, low oil prices
NEW YORK–US stocks fell decisively Wednesday, with petroleum-linked equities hit especially hard amid growing fears about the slowing Chinese economy.
The Dow Jones Industrial Average tumbled 162.61 points (0.93 percent) to 17,348.73.
The broad-based S&P 500 dropped 17.31 (0.83 percent) to 2,079.61, while the tech-rich Nasdaq Composite Index sank 40.30 (0.80 percent) to 5,019.05.
China worries have dominated trade since the Chinese central bank unexpectedly devalued the currency last week. That came on the heels of about six weeks of volatility in the Chinese stock market.
“China has now become the new geopolitical concern, replacing Greece,” said Sam Stovall, chief investment strategist at S&P Capital IQ.
Oil-linked equities suffered deep declines at the latest drop in oil prices, with ConocoPhillips losing 3.7 percent, Marathon Oil falling 7.2 percent and oil services company Weatherford International tumbling 5.5 percent.
US stocks were in the red all morning, but flirted with going positive after Federal Reserve minutes showed policy makers viewed the US economy as “approaching” the point of being able to weather an increase in near-zero interest rates.
However, stocks later fell back to near the levels prior to the release of the minutes.
Big-box retailer Target advanced 0.7 percent after lifting its full-year earnings forecast to $4.60-$4.75 per share from $4.50-$4.65 following a second quarter that bested the company’s projections.
Home-improvement retailer Lowe’s gained 1.9 percent as second-quarter earnings rose 8.4 percent to $1.1 billion.
Hormel Foods, a meat processor and food products company, rose 1.2 percent as it raised its earnings forecast to $2.57-$2.63 per share from $2.50-$2.60 per share.
Yum Brands, which owns the KFC and Pizza Hut restaurant chains, gained 2.2 percent as it announced appointments in its China division, including a new chief executive of the business, company veteran Micky Pant.
Bond prices rose. The yield on the 10-year US Treasury fell to 2.12 percent from 2.20 percent Tuesday, while the 30-year dropped to 2.81 percent from 2.86 percent. Bond prices and yields move inversely.
