What is being hailed by China’s state media as “Black Monday” did not just put a cloud over China’s stock market. Rather, concerns of an economic slump in China caused markets everywhere else to take a plunge, including Wall Street.
Chinese stocks fell Monday as concerns increased regarding a possible economic slowdown in the country. Chinese markets experienced a dip of 8.5%, according to Reuters. Meanwhile, the tumble of the Dow Jones industrial average soon followed, even going down by more than 1,000 points briefly during intraday trading. There were also reports of a trading halt and the New York Stock Exchange (NSYE) is bracing for it.
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However, Dow Jones also managed to recover from its plunge by half in just about 15 minutes. It is now down just 588.40 points or 3.57%. Nonetheless, Wall Street Indexes were still down by over 2% during mid afternoon trading. In fact, The Washington Post reports that the Dow, the SP 500 and the Nasdaq have remained in the negative.
The S&P 500 dropped by 3.94% to 1,893.21 points. Meanwhile, The Nasdaq Composite experienced a drop of 3.82%, bringing it 4,526.25 points. Meanwhile, the CBOE Volatility index, which is also known as the “fear index” went up by as much as 90% to 53.29 for a brief amount of time. This is the highest the said index had ever gone up since January 2009.
What the China market did was start a very effective game of nerves. Ladenberg Thalmann Asset Management Chief Executive Philip Blancato tells Reuters, “Emotions got the best of investors.”
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Media stocks respond to stock market drama
Meanwhile, emotion may have also been behind the response of media stocks in the wake of the Wall Street plunge. Variety reports that Netflix stocks went down by more than 10% during early trading and closed the day down almost 7% to $96.88.
At closing time, Viacom was already down by 4.3%. Comcase was down by 4.1%. Time Warner also experienced a 4% dip. Fox was down by 3.8%. Discovery stocks went down by 3.9%. Disney dipped by 3.5%. And CBS Corp. managed to just dip slightly by 2.5%.
Monday was so dramatic that networks like ABC and NBC broke into their daytime programming with news bulletins on the opening numbers. NBC also followed this up with an update at the closing bell.