Dow Jones scores 700 points as doubts swirl in Chinese real estate market

Stocks were trading at session low on Monday afternoon as concerns over the Chinese housing bubble disrupted global markets ahead of the Federal Reserve’s next policy meeting.

The Dow Jones Industrial Average lost 701 points, or 2.04%, while the S&P 500 Index and the Nasdaq Composite Index fell 2.12% and 2.67% respectively. The Dow Jones had earlier in the session reduced its loss to just 125 points.

Teleprinter Security Last Switch Switch %
Me: DJI MEDIUM DOW JONES 33770.04 -814.84 -2.36%
SP500 S&P 500 4327.1 -105.89 -2.39%
I: COMP NASDAQ COMPOSITE INDEX 14615.756959 -428.21 -2.85%

Shares of Chinese real estate developer Evergrande fell more than 15% on Monday, fearing the company might not be able to repay debt later this week.

INVESTORS EXCHANGE MONEY FOR STOCKS IN A QUICK FRENZY BEFORE THE FED MEETING

Some market watchers have called Evergrande China a “Lehman Brothers moment”, drawing comparisons to the collapse of the US investment bank, which sparked the 2008 financial crisis.

Hong Kong’s Hang Seng Index fell 3.3% as China’s Shanghai Composite was closed for the holidays. The sell-off spread to Europe, where the German DAX 30 fell 2.31%, the French CAC 40 lost 1.74% and the UK FTSE 100 fell 0.86%.

Closer to home, investors are eagerly awaiting the Federal Reserve’s two-day policy meeting, at which the central bank may announce the start of cutting its $ 120 billion per month asset purchases.

In equities, economically sensitive companies, including Caterpillar Inc. and Boeing Co., pushed the Dow Jones down amid doubts about growth.

Teleprinter Security Last Switch Switch %
CAT CATERPILLAR, INC. 189.51 -10.11 -5.06%
BA THE BOEING CO. 207.95 -5.29 -2.48%

These worries caused a flight to Treasuries, lowering the yield on the 10-year note by 3 basis points to 1.33% and flattening the yield curve. Bank stocks fell, JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. having all declined.

Teleprinter Security Last Switch Switch %
JPM JPMORGAN CHASE & CO. 151.76 -6.00 -3.80%
BAC BANK OF AMERICA CORP. 38.70 -1.82 -4.50%
VS CITIGROUP, INC. 66.45 -3.46 -4.95%

Home builder DR Horton Inc. has lowered its outlook for deliveries and revenues for the quarter and current year due to “significant supply chain disruptions.” Competitors Lennar Corp. and PulteGroup Inc. lost their sympathy as investors also weighed on a slight uptick in builders’ confidence.

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Teleprinter Security Last Switch Switch %
DHI DR HORTON, INC. 87.21 -3.46 -3.82%
LEN CORP. 97.10 -4.21 -4.16%
MPS PULTEGROUP, INC. 46.99 -1.59 -3.27%

Meanwhile, Pfizer Inc. and BioNTech SE have said their COVID-19 vaccine is safe and effective in children 5 to 11 years old. The companies plan to seek clearance in the United States, Europe and elsewhere as soon as possible.

Teleprinter Security Last Switch Switch %
PFE PFIZER INC. 43.80 -0.06 -0.13%
BNTX BIONTECH SE 341.00 -18.18 -5.06%

Energy stocks, including Chevron Corp. and Haliburton Co., were weaker as West Texas Intermediate crude slid from $ 1.45 to $ 70.52 per barrel.

Teleprinter Security Last Switch Switch %
CVX.HAL n / A n / A n / A n / A

Elsewhere, Barrick Gold Crop. and Newmont Corp. outperformed as gold climbed $ 9 to $ 1,760.40 an ounce.

Teleprinter Security Last Switch Switch %
GOLD BARRICK GOLD CORP. 18,465 +0.14 + 0.74%
NEM CORP. 53.84 -1.39 -2.51%

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