Japan market plunge sparks global sell-off; U.S. stocks dip, rebound
Wall Street followed Europe in a broad sell-off following a 7.3% overnight plunge in Japan’s stock market.
The Dow Jones industrial average shed 107.1 points, or 0.7%, to 15,200.07 shortly after the opening bell in New York.
The broader Standard & Poor’s 500 index tumbled 17.77 points, or 1.1%, to 1,637.58.
The technology-heavy Nasdaq was off 33.37 points, or 1%, 3,429.93.
[Updated 10:49 a.m. PDT, May 23, 2013: U.S. stocks significantly pared their losses as the day progressed. Midway through the trading session, the Dow was down 38.95 points, or 0.25%, to 15,268.22.
The S&P; 500 was down 8.86 points, or 0.54%, to 1,646.49. The Nasdaq was down 10.33, or 0.3%, to 3,452.97.]
Weak Chinese manufacturing data helped send Japan’s Nikkei down 1,143.28 points, or 7.3%, to 14,483.98. The drop was reportedly the worst percentage loss since the country’s March 2011 earthquake and ensuing tsunami.
European stock markets were also in the red, down about 2% or more.
Wall Street saw volatile trading on Wednesday following congressional testimony by Federal Reserve Chairman Ben S. Bernanke and the release of minutes from the central bank’s recent meeting.
Both raised questions about how soon the Fed might begin slowing its stimulus programs, which have fueled this year’s stock rally. Even with Thursday’s sharp sell-off, the Dow is still up 16% for the year.
The Japanese stock plunge overshadowed upbeat U.S. economic data showing moderate job growth.
The U.S. Labor Department said 340,000 people filed for unemployment benefits for the first time in the week ending Saturday, falling from a revised 363,000 the previous week. Economists had expected initial jobless claims to fall to 345,000 last week.
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