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Saturday, August 22, 2015, 11:50

US stocks plummet following global rout

By Xinhua
US stocks plummet following global rout
A screen above the floor of the New York Stock Exchange shows the closing numbers, Aug 21, 2015. (AP Photo/Richard Drew)

NEW YORK — US stocks continued to plunge Friday, with the Dow Jones Industrial Average tumbling more than 500 points, as a broad-based heavy sell-off in global stock markets rattled nervous investors.

The Dow tumbled 530.94 points, or 3.12 percent, to close at 16,459.75. The S&P 500 shed 64.84 points, or 3.19 percent, to 1,970.89. The Nasdaq Composite Index sank 171.45 points, or 3.52 percent, to 4,706.04.

China stocks continued to slump Friday after the release of weak economic data, with the benchmark Shanghai Composite Index diving 4.27 percent to close at 3,507.74 points.

The Caixin Flash China General Manufacturing PMI retreated to 47.1 in August from 47.8 in July, the lowest point since March 2009.

For the week, the Shanghai Composite Index sank more than 11 percent, the sharpest weekly drop since the week ending July 3.

European equities also ended sharply lower Friday following previous session's deep decline, with British benchmark FTSE 100 Index shedding 2.83 percent, as traders were spooked by worse-than-expected Chinese economic data and a new election in Greece.

Adding more pessimism into the market, US economic data came out weaker than expected. Financial data firm Markit reported Friday that US manufacturers indicated a renewed loss of momentum during August.

The headline seasonally adjusted Markit Flash US Manufacturing Purchasing Managers' Index dipped from 53.8 in July to 52.9 in August, the lowest level since October 2013.

Meanwhile, investors were still pondering over the ongoing uncertainty about the timing of an interest rate hike by the US Federal Reserve.

Market analysts widely see September or even later as the most likely time for a Fed rate increase, which also dampened investor enthusiasm.

A renewed plunge in oil prices provided some downward jolts to the stock market too. The US oil benchmark slid below 40 US dollars a barrel in intraday trading for the first time since February 2009, as signs showed that oil producers kept on pumping despite the falling prices.

At the close, the West Texas Intermediate for October delivery moved down 87 cents to settle at US$40.45 a barrel on the New York Mercantile Exchange, while Brent crude for October delivery decreased US$1.16 to close at US$45.46 a barrel on the London ICE Future Exchange.

On Thursday, US stocks suffered big losses amid mixed economic reports, with the three major indices on a three-day losing streak, as worries about a slowdown in global growth weighed on Wall Street sentiment.

In a weekly basis, the three major indices witnessed the worst week in nearly four years, with the Dow, the S&P 500 and the Nasdaq diving 5.8 percent, 5.8 percent and 6.8 percent, respectively.

The CBOE Volatility Index, often referred to as Wall Street's fear gauge, soared 46.45 percent to end at 28.03 Friday.

In other markets, the US dollar dropped against most major currencies Friday as investors lowered their expectation for an interest-rate hike as early as September.

In late New York trading, the euro rose to 1.1359 dollars from 1.1193 dollars in the previous session, while the dollar bought 122.06 Japanese yen, lower than 123.48 yen of the previous session.

Gold futures on the COMEX division of the New York Mercantile Exchange rose Friday on a weaker US dollar and lower equities.

The most active gold contract for December delivery added US$6.4, or 0.55 percent, to settle at US$1,159.60 per ounce.

For the week, gold futures climbed 4.21 percent, their largest weekly gain since the week ended Jan 16 this year.

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