U.S. stocks pared most of Monday’s steep losses after a rocky morning during which the Dow Jones Industrial Average briefly plummeted more than 1,000 points.
The blue-chip benchmark was recently down 117 points, or 0.7%, to 16342 as traders said mutual funds and other investors began stepping in to buy up beaten down stocks.
The Dow industrials plunged as much as 1,089 points shortly after the open, marking the index’s largest one-day point decline ever on an intraday basis, amid a selloff that has hammered stock markets from Beijing to London to New York.
The S&P 500 dropped 19 points, or 1%, to 1952, entering correction territory. The Nasdaq Composite fell 18 points, or 0.4%, to 4688.
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Investors stampeded into relatively safe assets such as U.S. government bonds, the Swiss franc and the yen. The yield on the 10-year Treasury note dropped below 2% during Asian trading and recently was 2.026%.
Fears that China’s economy is slowing dramatically sparked the heavy selling in stocks around the globe in recent days. Beijing’s unexpected move to devalue its currency two weeks ago raised the alarm that the world’s second-largest economy may be in worse shape than many had thought. Since then, weak economic data have fueled worries that a drop-off in Chinese growth could cause a global slowdown.
China’s Shanghai Composite sank 8.5% on Monday, entering negative territory for 2015, having risen as much as 60% to its June peak. Japan’s Nikkei benchmark tumbled 4.6%.
In Europe, the Stoxx Europe 600 fell 4.6% and Germany’s DAX dropped 3.7%. Germany’s stock market, which contains many car makers and industrial firms with a big chunk of their sales in China, has been among the worst-hit by the recent selloff.