Tokyo markets sharply down amid global worries

August 26 01:53 2015

The global financial turmoil continued Tuesday as Tokyo financial markets opened sharply down. The Nikkei Stock Average dropped 369 points at the opening Tuesday to 18,171, while the broader Topix fell 29 points to 1,451. Each were down about two percent. That followed Monday’s continued downdraft on Wall Street as the Dow Jones industrial average – which was briefly down more than 1,000 points — finished with its second drop of more than 500 points in as many days and the broader Standard & Poor’s 500-stock index tumbled into official correction mode for the first time since 2011.

The selling spree on Wall Street, which has been driven by a global growth scare sparked by fears of a severe economic slowdown in China, has now infected every corner of the U.S. stock market. The Dow, small-company Russell 2000, large-company S&P 500 and tech-dominated Nasdaq composite are all down more than 10% from their record peaks from earlier this year and in full-fledged corrections.

The turbulence has Wall Street debating whether it is just a short-term correction that has created pockets of value in what had been an overpriced market or something worse. Traders are also wondering whether the China-inspired global market dive could cause the Federal Reserve to delay its first interest rate hike in more than a decade. Barclays, for example, on Monday pushed back its rate-hike timetable from September to March 2016.

In volatile trading Monday, the Dow initially plunged as much as 1,089 points in early trading before almost clawing back to even, only to succumb to a late-day swoon. At its low point, the Dow was in danger of suffering its worst one-day point loss on record — a 777.68 drop on Sept. 29, 2008. The Dow is now down 13.3% from its high and down nearly 11% this year.