Stocks hammered: Dow down 200+, Nasdaq off 2%

September 28 23:16 2015

Stocks tumbled Monday to kick off the new week in the red, as Wall Street reacts to fresh data showing China’s economy is in slowdown mode, overshadowing a big deal in the hard-hit energy patch. The Dow Jones industrial average was down more than 200 points, or 1.5%, in early afternoon trading. The Standard & Poor’s 500 index fell 1.9% and the Nasdaq composite index dropped 2.2%. The U.S. stock market is still coping with its first market correction, or drop of 10% or more, since 2011.stock_market_01

The latest hit to investor sentiment was a continued drop in Chinese Industrial Profits, which fell 8.8% in August vs. the same period a year ago. This is just the latest data point out of the world’s second- biggest economy that suggests economic softening. Another headline putting investors in a risk-off mode are reports that Volkswagen’s ex-CEO is being investigated for criminal charges by German authorities as part of the investigation into the emissions-cheating scandal that has engulfed the carmaker in recent weeks.

Also adding to the market’s angst is a 20% plunge in shares of global commodity giant Glencore. In addition, hedge fund manager and billionaire investor Carl Icahn is set to release a video tomorrow warning of danger ahead for markets, aruging that the Federal Reserve’s low interest rate policy has led to bubbles in art, real estate and high-yield bonds and that the fallout could be severe.

The Fed, of course, opted not to hike interest rates at its meeting earlier this month, but Fed chair Janet Yellen reiterated in a speech Thursday that the U.S. central bank is still on track to hike rates sometime in 2015. Those comments were echoed earlier today by New York Federal Reserve president William Dudley. Dudley is just one of four Fed speakers slated to comment on monetary policy today.