The Dow Jones Industrial Average plunged about 400 points in early trade Monday as a 7% drop in Chinese shares stoked a global selloff in stocks.
The Dow DJIA, -1.94% plunged nearly 411 points to 17,015, led by a drop in DuPont Co. DD, -4.11% and American Express Co. AXP, -2.90%
The S&P 500 SPX, -1.93% fell about 45 points to 1,998, led by a decline in technology stocks, financials and industrials. Only the S&P 500’s energy sector showed a modest gain as Middle Eastern tensions helped lift crude-oil prices.
“It is not surprising to see such a selloff considering negative headlines from China and tensions between Iran and Saudi Arabia. What is surprising is that it is happening on the first day of the year,” said Ryan Larson, head of equity trading at RBC Global Asset Management.
“While trading desk are busier than they normally would be on Mondays, this is not a panic selling, it’s orderly. We are likely to see this kind of volatility a lot in 2016,” Larson said.
The S&P 500-tracking “SPY” ETF opened down nearly 2%. According to Bespoke Investment Group analysts, since the SPY SPY, -1.82% began trading in 1994, the ETF has opened lower on the first trading day of the year only twice in 22 years, and never by more than 1%.
Meanwhile, the Nasdaq Composite COMP, -2.36% tumbled by 138 points to 4,869 as tech stocks took the brunt of Monday’s drop.