New York – Wall Street In Free-fall; All Three Indexes In Correction

New York – Wall Street opened sharply lower on Monday with the Dow Jones industrial average losing more than a 1,000 points following a more-than 8 percent drop in Chinese shares and a selloff in oil and other commodities.

The Dow has never lost more than 800 points in a day.

Futures on the Nasdaq, S&P and Dow indexes were halted briefly before the market opened after hitting a circuit breaker, a step taken by exchanges to reduce volatility and give investors time to assess information.

With Monday’s selloff, the S&P 500 index and the Nasdaq composite slipped into correction mode, joining the Dow, which slid into correction territory on Friday.

An index is considered to be in correction when it falls 10 percent from its 52-week high.

The New York Stock Exchange invoked a rule saying market makers don’t have to disseminate price indications before the opening bell in an effort to make it easier and faster to open stocks on a volatile trading day.

At 9:38 a.m. ET the Dow Jones industrial average < .DJI> was down 830.66 points, or 5.05 percent, at 15,629.09, the S&P 500 < .SPX> was down 91.46 points, or 4.64 percent, at 1,879.43 and the Nasdaq Composite was down 282.50 points, or 6 percent, at 4,423.54.

All 10 major S&P 500 sectors fell, with health and technology falling more than 6 percent. All stocks in the Dow were in the red.

The S&P 500 index showed 132 new 52-week lows and just two highs, while the Nasdaq recorded 504 new lows and two new highs.

Apple shares slid as much as 13 percent to hit a low of $92, losing nearly $80 billion of market value. The stock later recovered to trade at $99.50, down 5.8 percent.

The lack of new measures from Beijing to support Chinese stocks following an 11 percent drop last week sparked a plunge in global equities and a selloff in oil and commodities.

Oil fell more than 5 percent to a 6-1/2-year low, while London copper and aluminum futures hit their lowest since 2009.

Oil majors Exxon and Chevron fell about 6.6 percent. U.S. oil and gas stocks have already lost about $310 billion of market value this year.

“Until we have some sign that China and the emerging markets aren’t being sucked into some vortex from which they can’t recover … it is unlikely this selloff will stem,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

The dollar index fell 2 percent to a 7-month low as the probability of a September rate hike receded.

Traders now see a 24 percent chance that the Fed will increase rates in September, down from 30 percent late on Friday and 46 percent a week earlier, according to Tullett Prebon data.

Wall Street’s selloff last week showed investors are becoming increasingly nervous about paying high prices for stocks at a time of minimal earnings growth, tumbling energy prices, and an expected rate hike by the U.S. Federal Reserve.

Netflix fell 13.4 percent to $90.37.

Alibaba fell 13.5 percent to $58.16, well below its IPO price of $68, making it the second high-profile tech company to fall below its IPO price in the past week after Twitter on Thursday.

Declining issues outnumbered advancing ones on the NYSE by 1,438 to 22. On the Nasdaq, 2,550 issues fell and 134 advanced.