Jonathan Corpina, senior managing partner with brokerage firm Meridian Equity Partners Inc., weighs in on the Dow extending last week's losses amid global fears about China's economic outlook.
U.S. stocks fell over 1 percent on Monday, after Wall Street took a nosedive last week, amid fears that the Federal Reserve may begin to scale back its stimulus measures.
Global equities plunged on Monday after last week’s stimulus concerns, along with fears that China may begin to tighten its financial policy. The Shanghai Composite suffered its worst one-day sell off in nearly four years as the People's Bank of China refrained from pumping cash in to the economy.
The sharp pullback in global equities, bond prices and commodities follows last week’s plunge after Fed Chairman Ben Bernanke hinted in a press conference after a two-day FOMC meeting the central bank may scale back its stimulus program later this year.
Adding to global concerns, Goldman Sachs downgraded China's growth outlook on Monday, saying tighter financial conditions are a downside risk for the world's second largest economy.
Although there is no U.S. macro data Monday, on the economic calendar for Tuesday, economists will be keeping their eyes on durable goods orders for May released at 8:30am Eastern. Also on Tuesday, the Case-Shiller home prices and FHFA home prices for April are issued at 9:00am EST, and new home sales for May and onsumer confidence for June are reported at 10:00am EST.
As of 12:57pm EST, the Dow Jones industrial average .DJI was down 190 points, or 1.28 percent, at 14,609.33. The Standard & Poor's 500 Index .SPX was down 26 points, or 1.64 percent, at 1,566.32. The Nasdaq Composite Index .IXIC was down 51 points, or 1.52 percent, at 3,306.34.