NEW YORK (AP) – Stocks were solidly lower in early trading Monday, following a steep sell-off in China and other global markets.
The Dow Jones industrial average lost 147 points, or 0.8 percent, to 17,420 as of 10:04 a.m. Eastern time. The Standard & Poor’s 500 index lost 13 points, or 0.6 percent, to 2,066 and the Nasdaq composite lost 40 points, or 0.8 percent, to 5,047.
The main focus for investors was the precipitous 8.5 percentage point fall on the Shanghai market overnight, which was the biggest one-day decline since February 2007. It was the latest big drop in the Chinese stock market, which has been falling since early June.
Some analysts said the dive was set off by brokerages restricting credit used to finance stock purchases, also known as margin trading. Chinese authorities took aggressive steps to stabilize the market after it tumbled last month, wiping away about $3.2 trillion in market value. Analysts have been skeptical that such gravity-defying efforts could be sustained.
“The continuous check on margin trading by security companies has triggered today’s sell-off,” said Xu Xiaoyu, a market strategist at China Investment Securities. “In addition, the recent economic data shows it still takes time for the economy to recover from its sluggishness.”