The Dow Jones Industrial Average plunged 586 points, or 1.7%, while the S&P 500 index and the Nasdaq Composite index declined 1.69% and 1.99%, respectively.
|I:DJI||DOW JONES AVERAGES||34098.42||-486.46||-1.41%|
|I:COMP||NASDAQ COMPOSITE INDEX||14798.713245||-245.25||-1.63%|
Chinese real estate developer Evergrande’s shares tumbled more than 15% Monday amid worries the company will not be able to make a debt payment later this week.
Some market watchers have called Evergrande China’s “Lehman Brothers moment,” drawing comparisons to the collapse of the U.S. investment bank, which began the 2008 financial crisis.
Hong Kong’s Hang Seng index tanked 3.3% while China’s Shanghai Composite was closed for holiday. The selling spilled over into Europe, where Germany’s DAX 30 fell 2.%, France’s CAC 40 lost 2.39% and Britain’s FTSE 100 dropped 1.61%.
Closer to home, investors are looking ahead to the Federal Reserve’s two-day policy meeting, where the central bank could announce when the tapering of its $120 billion per month of asset purchases will begin.
In stocks, economically sensitive companies, including Caterpillar Inc. and Boeing Co., dragged the Dow lower amid growth doubts.
|BA||THE BOEING CO.||208.88||-4.36||-2.04%|
Those worries caused a flight into Treasurys, pushing the yield on the 10-year note down 3 basis points to 1.33% and flattening the yield curve. Bank stocks declined with JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. all lower.
|JPM||JPMORGAN CHASE & CO.||154.05||-3.71||-2.35%|
|BAC||BANK OF AMERICA CORP.||39.29||-1.23||-3.03%|
Meanwhile, Pfizer Inc. and BioNTech SE said their COVID-19 vaccine is safe and effective in 5- to 11-year-olds. The companies plan to seek authorization in the U.S., Europe and elsewhere as soon as possible.
Energy stocks, including Chevron Corp. and Haliburton Co., were weaker as West Texas Intermediate crude oil slid $1.19 to $70.78 a barrel.
Elsewhere, Barrick Gold Crop. and Newmont Corp. outperformed as gold ticked up $7.70 to $1,759.10 an ounce.
|GOLD||BARRICK GOLD CORP.||18.115||-0.21||-1.17%|
Economic data is light on Monday with the National Association of Home Builders to release its latest assessment on the state of the housing market.