U.S. Stock Market Has Largest Drop In Nearly 4 Years
NEW YORK — Growing concerns about a slowdown in China shook markets around the world on Friday, driving the U.S. stock market to its largest drop in nearly four years.
The rout started in Asia and quickly spread to Europe, battering major markets in Germany and France. In the U.S., the selling started early and never let up. Investors ditched beaten-down oil companies, as well as Netflix, Apple and other technology darlings. Oil plunged below $40 for the first time since the financial crisis, and government bonds rallied as investors raced into hiding spots.
"Investors are wondering if growth isn't coming from the U.S. or China, where is it going to come from?" said Tim Courtney, CIO of Exencial Wealth Advisors. "This is about growth."
By the time it was over, the Standard and Poor's 500 index had lost 5.8 percent for the week, its worst weekly slump since 2011. That leaves the main benchmark for U.S. investments 7.7 percent below its all-time high — within shooting range of what traders call a "correction," a 10 percent drop from a peak.
Markets began falling last week after China announced a surprise devaluation of its currency, the yuan. Investors have interpreted China's move as a sign that flagging growth in the world's second-largest economy could be worse than government reports suggest. On Friday, they got more bad news: A private survey showed another drop in manufacturing on the mainland.