The Dow dropped more than 800 points, adding to three straight weeks of losses, as fears over China’s debt-ridden property market helped spark a global selloff.
The Dow Jones industrial average was recently off 814 points, or over 2.4 percent, in early afternoon trading Monday. The S&P 500 fell 2.1 percent — on pace for its worst day since mid-May — while the Nasdaq tumbled 2.6 percent.
Embattled developer China Evergrande Group has warned investors of cash-flow problems and that it may default on its debt obligations, which analysts at UBS have pegged at about 6.5 percent of the total debt held by China’s property sector.
A default of that size could spill over into other sectors and hit companies in other countries, analysts said. In particular, investors are concerned about ripple effects of the crackdown in China on the property development market. Hong Kong stocks saw a major selloff earlier Monday with the Hang Seng index plunging more than 3 percent.
“It raises the question if there are similar companies and similar situations investors haven’t looked at,” said Tim Anderson, managing director at TJM Investments.
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