U.S. stocks closed sharply lower Thursday as China news overnight and low oil prices renewed concerns about global economic growth. (Tweet This )
The Dow Jones industrial average briefly fell more than 400 points to trade more than 10 percent below its 52-week intraday high, in correction territory. The Nasdaq composite was temporarily down 3 percent, also trading in correction territory.
The S&P 500 briefly traded more than 2.5 percent lower, about 9 percent away from its 52-week intraday high in afternoon trade.
Citing sources, Reuters reported in early afternoon trade that China’s central bank is under increasing pressure from policy advisors to let the yuan currency fall quickly and sharply, by as much as 10-15 percent, as its recent gradual softening is thought to be doing more harm than good.
“Definitely the Reuters story was negative and hit the market pretty hard,” said Ilya Feygin, senior strategist and managing director at WallachBeth Capital.
Traders also noted failure to hold technical levels and concerns ahead of potential Thursday night news.
Weighing on markets overnight was news the People’s Bank of China set the yuan reference rate at 6.564, its lowest since 2011 and thelargest daily change since Aug. 13, according to Reuters. A trade halt in China due to a circuit breaker also shook global markets.
“Another day here, another yuan devaluation. I don’t think a lot has changed a whole lot coming into today except energy continues to go down,” said Art Hogan, chief market strategist at Wunderlich Securities.
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