U.S. stocks closed lower on Monday under pressure from an overnight plunge in the Shanghai Composite and a continued decline in commodities, amid a lackluster earnings season. ()
“The fear factor of China is very much alive in the market. That’s nearing us to some technical support levels,” said Peter Cardillo, chief market economist at Rockwell Global Capital. “Slow growth out of China just complicates the oil picture.”
Stocks came off session lows in the close. The S&P 500 dipped below its 200-day moving average of 2,064.14 and closed a few points above it. The energy sector was the worst performer in the S&P 500 as oil extended losses to trade below $48 a barrel.
The Dow Jones industrial average closed about 127 points lower to its lowest level since February 2. Earlier, the index fell more than 150 points. The Nasdaq Composite ended nearly 1 percent lower.
“I think it’s taking money off the table, waiting to see what happens in China—some clarity,” said Phil Quartuccio, CEO of Illustro Trading.
Mainland Chinese stocks extended Friday’s losses, with thefor its largest one-day loss since 2007. The Hang Seng closed about 3 percent lower.
The China Securities Regulatory Commission said late Monday night that the local government will increase purchases of stocks in an effort to keep the equity market up.
Stocks around the world closed lower on Friday as weak PMI data in China and the euro zone increased global growth concerns.
“Coming into the market you got this great sense that we can’t avoid what’s happening in the global-macro,” said Art Hogan, chief market strategist at Wunderlich Securities. “We just went through a week (in which) 75 percent of S&P companies beat estimates and you would never realize that by the way the market (reacted). You got a week characterized by lackluster revenue growth.”
The Thomson Reuters CRB commodities index on Monday hit its lowest level in six years. Copper futures fell more than 1.5 percent and U.S. oil futures were more than 2 percent lower near $47 a barrel. However, gold prices gained to hold above 5-1/2 year lows.
Crude oil futures settled down 75 cents at $47.39 a barrel, the lowest level since March 20. Gold futures ended up $10.90 at $1,096.40 an ounce.
The U.S. dollar fell nearly 1 percent against major world currencies, with the euro briefly creeping above $1.11 and the yen at 123.2 yen against the greenback.
Treasury yields held lower, with theat 2.22 percent and the at 0.65 percent.
Adding to negative sentiment on growth, the number of new lows on the New York Stock Exchange hit the
“It’s a concern,” said Marc Chaikin, CEO of Chaikin Analytics. “I think this is a one time when the technicals really have to be your guide. The internals—breadth numbers—are not good.”
Still, he said that “until we break that 2,040 level on the downside, I think everything is going to signal the bull market is still intact.”
European stocks closed lower, with the DAX off about 2.5 percent Monday.gave up early gains to trade lower, with Dow Jones industrial average futures down more than 100 points.
“China’s already happened so there’s nothing more to happen out of China today,” said James Meyer, chief investment officer at Tower Bridge Advisors. “What you’re going to watch today is commodities and earnings. It’s the biggest week in S&P earnings this week.”
The Chinese search engineposts results after the close. Several Internet giants reporting results over the next few days include on Tuesday, on Wednesday and on Thursday.
Meanwhile, Juneshowed an increase of 3.4 percent, beating expectations slightly. No other major economic data is due.
The Federal Reserve begins its two-day meeting on Tuesday.
In corporate news, Israel’ssaid it will buy ‘s generic pharmaceuticals business for $40.5 billion.
U.S. regulators fined Fiat Chrysler a record $105 million for.
Theclosed down 127.94 points, or 0.73 percent, at 17,440.59, with leading decliners and the greatest advancer.
Theclosed down 12.00 points, or 0.58 percent, at 2,067.65, with energy leading nine sectors lower and utilities the only gainer.
Theclosed down 48.85 points, or 0.96 percent, at 5,039.78.
The, widely considered the best gauge of fear in the market, traded above 16.
About 11 stocks declined for every four advancers on the New York Stock Exchange, with an exchange volume of 922 million and a composite volume of nearly 4 billion in the close. The average trade volume is 3.5 billion.