Stocks mixed as Street gets past yesterday’s scare

January 07 03:56 2016

Following the Dow’s worst start to a year since 2008, an attempted rebound on Wall Street stalled Tuesday as stocks ended mixed. The Dow Jones industrial average, which tumbled 1.6% Monday, inched up about 10 points, or 0.1%, after rising as high as about 50 points and falling as low as about 100 earlier. The Standard & Poor’s 500 gained 0.2%, while the tech-heavy Nasdaq composite fell 0.2%. Wall Street entered the second day of trading of 2016 on the defensive as investors still reeled from a global stock sell-off Monday and evaluated the most recent steps taken by Chinese authorities to stabilize markets and reduce investor jitters.1215-stock-market_full_600

Overnight, shares in mainland China stabilized with the help once again from government intervention in markets a day after a 7% plunge prompted an early halt to trading in what was the worst start to the year ever for China stocks. The CSI 300 index in China finished with a small gain after dipping as much as 2% and the Shanghai composite index fell 0.3%. The early-year volatility is gaining a lot of attention as a weak start to 2016 could set a negative tone for the full year.

Many market pundits say investors should prepare themselves for a year of volatility as China and its slowing economy stays in the spotlight. “I think this is mostly about China,” Mark Luschini, chief investment strategist at Janney Montgomery Scott. “The lack of evidence that officials there have arrested the growth deceleration is worrisome. This means, for me, that while Monday’s action may be more than just China, add tensions between Saudi Arabia and Iran and yesterday’s weak manufacturing data in the U.S., the market’s skittishness will linger until the China story is resolved.”

Global stocks had a not so happy first day of trading in the new year when investors reacted negatively to a manufacturing report out of China that showed contraction for the tenth straight month. The latest weak data point from China reignited fears of a sharper slowdown in global growth.