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US: Stocks drop on worries about China, low oil prices
[NEW YORK] US stocks fell decisively on 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 per cent) to 17,348.73.
The broad-based S&P 500 dropped 17.31 (0.83 per cent) to 2,079.61, while the tech-rich Nasdaq Composite Index sank 40.30 (0.80 per cent) 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 per cent, Marathon Oil falling 7.2 per cent and oil services company Weatherford International tumbling 5.5 per cent.
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 per cent after lifting its full-year earnings forecast to US$4.60-4.75 per share from US$4.50-4.65 following a second quarter that bested the company's projections.
Home-improvement retailer Lowe's gained 1.9 per cent as second-quarter earnings rose 8.4 per cent to US$1.1 billion.
Hormel Foods, a meat processor and food products company, rose 1.2 per cent as it raised its earnings forecast to US$2.57-2.63 per share from US$2.50-2.60 per share.
Yum Brands, which owns the KFC and Pizza Hut restaurant chains, gained 2.2 per cent 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 per cent from 2.20 per cent Tuesday, while the 30-year dropped to 2.81 per cent from 2.86 per cent. Bond prices and yields move inversely.