Ryan Gaumont reports that the New Year did not start off well for Wall Street. On Monday, the Dow-Jones Industrial Average had its biggest opening-day loss since 2008. The 276 point drop in the Dow was a reaction to a report of weak Chinese manufacturing activity, which caused a 6.9 percent drop in the Chinese stock market. The bad news from China affected stock markets in Asia and Europe as well. NASDAQ and S&P indexes were down as well.
The price of crude oil was also down on Monday. The market for petroleum is oversupplied, and lower manufacturing in China does not help the situation. Another factor to be considered is the action by Saudi Arabia to sever diplomatic ties with Iran. The conflict between the two Middle Eastern countries began when Saudi Arabia executed Nimr al Nimr, a Shiite cleric, on Saturday. Angry protesters in Iran responded by setting fire to the Saudi embassy in Tehran.
It is not certain what will happen on Wall Street today. However, the problems could continue. China’s central bank injected about $19.9 billion in short term funds into the Chinese financial system, and efforts were made to stabilize the Chinese stock market when selloffs occurred.
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