Stocks closed sharply lower Monday, the first day of trade of the year, weighed by renewed concerns of global economic slowdown and increased tensions in the Middle East. An overnight drop in Chinese stocks that triggered a new circuit breaker rule also pressured sentiment.
"Anytime a big market stops trading and it spills over to Europe, investors are nervous," said Marc Chaikin, CEO of Chaikin Analytics.
"Ex-China we were expecting a positive (market). At the end of the day, except for a few companies like Caterpillar, this really shouldn't have an impact on our markets," he said.
The Dow Jones industrial average lost 276 points. Earlier, the index fell more than 450 points, down more than 2.5 percent, on pace for its largest percent decline on the first trading day of the year since 1932.
"I think it's just some bottom fishing going on. Maybe some overreaction (earlier) to the news coming out of China. Oil still has a chance at a rebound," said Robert Pavlik, chief market strategist at Boston Private Wealth.
U.S. data released Monday morning reaffirmed concerns about global manufacturing. The U.S. December ISM Manufacturing Index was 48.2, below expectations and down from November's 48.6 print.
"That's not helping because last week we had a couple more minor PMI readings and they showed the same thing," said Mark Luschini, chief investment strategist at Janney Montgomery Scott.
Last Thursday, the Chicago PMI came in at 42.9 for December, down from 48.7 in November.
The Nasdaq closed more than 2 percent lower, below the psychologically key 5,000 level. The index briefly traded more than 3 percent lower. Apple briefly attempted to trade higher after earlier falling more than 3 percent, while the iShares Nasdaq Biotechnology ETF (IBB) held more than 3 percent lower in afternoon trade.
The S&P 500 lost about 1.75 percent, struggling to hold the psychologically key 2,000 level. The index briefly dipped below that level in intraday trade for the first time since mid-December.
"We took out 2,000 on the S&P 500 and 17,000 on the Dow. That (may be) creating some levels for some selling going down," Peter Coleman, head trader at Convergex, said of the mid-morning decline in stocks.
Financials, health care, and technology fell more than 2 percent in afternoon trade to lead all S&P 500 sectors lower.
Tesla and Chinese e-commerce site JD.com fell more than 7 percent in afternoon trade as the greatest decliners in the Nasdaq 100.
"A lot of it has to do with China and a lot of it is overdone," said Art Hogan, chief market strategist at Wunderlich Securities. "The China PMI hasn't changed much. It's not unusual to have an outsized reaction when you've got a base case that 2016 could be a tough year."
"I think it's very much global markets are in a risk-off mode. It's very hard to step in the way of (that)," he said.
European stocks closed sharply lower, with the German DAX falling more than 4 percent for its largest daily decline since Aug. 24, 2015. The STOXX Europe 600 closed about 2.5 percent lower.
Oil turned lower after initially rising amid increased tension in the Middle East.
U.S. crude oil futures settled down 28 cents, or 0.76 percent, at $36.76 a barrel, giving up an earlier spike to above $38.30 a barrel.
Saudi Arabia, the world's biggest oil exporter, cut diplomatic ties with Iran on Sunday in response to the storming of its embassy in Tehran. The protest followed Saudi Arabia's execution of a prominent Shiite cleric.
Chinese stocks plunged Monday after Caixin manufacturing PMI showed continued contraction in that area of the economy.
Traders also reduced positions in small caps ahead of the Friday expiration of a six-month selling ban imposed on the major shareholders of listed companies, StreetAccount said. The Chinese yuan also weakened to hit its lowest since 2011.
The Shanghai and Shenzhen exchanges ended the trading session early after the CSI 300 dropped 7 percent, triggering a circuit breaker. The halt was the first implementation of the new circuit breaker rule announced September.
The iShares MSCI Emerging Markets ETF (EEM) traded about 3 percent lower. The Deutsche X-trackers Harvest CSI 300 China A-Shares ETF (ASHR) fell more than 9.5 percent in afternoon trade.
China's Shanghai composite lost nearly 6.9 percent for its worst day since Aug. 25, 2015.
Over the weekend, China reported manufacturing PMI that remained below the 50 level that indicates contraction. The official manufacturing PMI for December was 49.7 after posting 49.6 in November, while the Caixin December manufacturing PMI was 48.2 versus November's 48.6.
The official services PMI edged higher to 54.4 from 53.6 the prior month.
In other U.S. economic news, the December U.S. Markit manufacturing PMI was 51.2. Construction spending fell 0.4 percent in November.
Treasury yields hit their lowest levels in a week. The 2-year yield held near 1.02 percent and the 10-year yield was around 2.22 percent as of 1:20 p.m., ET.
The U.S. dollar traded about 0.3 percent higher against major world currencies, with the euro near $1.08 and the yen at 119.43 yen against the greenback.
Gold traded more than 1 percent higher after earlier rising more than 1.5 percent to hit its highest level in almost two weeks.
U.S. stocks closed lower Thursday, the last day of trade for 2015. Markets were closed Friday for New Year's Day.
The S&P 500 and Dow Jones industrial average posted losses for the year, their worst annual performance since 2008. The Russell 2000 and Dow transports also had their worst year in seven.
The Nasdaq composite ended more than 5.5 percent higher for 2015, helped by outperformance in biotech stocks and major tech names, except Apple. The iPhone maker's stock turned in its first negative year since 2008.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 22 after earlier topping 23 to hit its highest level in two weeks.
About 11 stocks declined for every four advancers on the New York Stock Exchange, with an exchange volume of 582 million and a composite volume of 2.9 billion.
Gold futures for February delivery settled up $15 at $1,075.20 an ounce.
More From CNBC.com:

(My bolding - Dhal)

Yeah, nothing to worry about! It's all copasetic! Look over there, terrorists!

Worst 1st week for 'the market', evah

http://www.zerohedge.com/news/2016-01-08/market-massacre-worst-ever-first-week-trading

Lots of graphs that all go in the same direction.

Meanwhile, back in the real world....




Half of Americans Make Less than a Living Wage

According to the Social Security Administration, over half of Americans make less than $30,000 per year.

That's less than an appropriate average living wage of $16.87 per hour, as calculated by Alliance for a Just Society (AJS), and it's not enough -- even with two full-time workers -- to attain an "adequate but modest living standard" for a family of four, which at the median is over $60,000, according to the Economic Policy Institute.

AJS also found that there are 7 job seekers for every job opening that pays enough ($15/hr) for a single adult to make ends meet.



Half of Americans Have No Savings

A study by Go Banking Rates reveals that nearly 50 percent of Americans have no savings. Over 70 percent of us have less than $1,000. Pew Research supports this finding with survey results that show nearly half of American households spending more than they earn. The lack of savings is particularly evident with young adults, who went from a five-percent savings rate before the recession to a negative savings rate today.

snip:

Jobs gained since the recession are paying 23 percent less than jobs lost. Low-wage jobs (under $14 per hour) made up just 1/5 of the jobs lost to the recession, but accounted for nearly 3/5 of the jobs regained in the first three years of the recovery.

Furthermore, the official 5% unemployment rate is nearly 10% when short-term discouraged workers are included, and 23% when long-term discouraged workers are included. People are falling fast from the ranks of middle-class living. Between 2007 and 2013 median wealth dropped a shocking 40 percent, leaving the poorest half with debt-driven negative wealth.

http://www.alternet.org/economy/half-america-or-damn-near-close-living-poverty

Of course, negative savings, skyrocketing living costs, and insecure, low-wage "service" employment (to the extent that there is employment at all) has been the norm for countless people living under capitalism for a long time now. It is the way of the world...the neoliberal world, that is. Globalized markets, and whatnot.

The system may be in crisis, but a crisis is no guarantee that the Left will win....

The system may be in crisis, but a crisis is no guarantee that the Left will win....

Yep, for the Left to win it must first exist. Bernie and his minions are not the Left, Bernie is the latest of a series of preventive measures against the faintest stirings of a Left, as was Obama. After this Bernie scam reaches it's destined apogee and capitulation it'll probably be Warren, or somebody. It'll hardly matter, as long as they can herd sheep.

Rule One has to be: If it comes from the Democratic Party then it is not worth even a glance, that candidate is poison. The foolish notion that these sheepdogs can be employed as guide dogs to a real left is utterly disproved by recent history. Where is the left built by Kucinich, except in the fools (the kindest thing I can say) who now promote Sanders as the gateway our socialist future? Hmm...