Photo by Richard Drew/AP
After surging more than 440 points early in the day on Tuesday, initial gains on the Dow Jones industrial average disappeared and the index recorded a 205-point loss for the day overall.When markets opened Tuesday in the US, the index spiked by 350 points, a rise that came after a drop of more than 1,000 points at the opening bell yesterday. The fall today brings the Dow's total loss over a six-day trading period to 1,900 points, down 11 percent.The Dow's 1,100-point decline in just the initial six minutes of trading on Monday was the highest intra-day loss in history. By the end of the day, the tumbling stocks recovered somewhat, but still ultimately finished 558 points down, an 18-month low.Other markets were on the up Tuesday, with Frankfurt and Paris each seeing 4 percent gains, as London saw its stocks up 3 percent. While American and European markets seemed to bounce back, Asian stocks did not see the same rebound. Japan's main index fell 4 percent, and the Shanghai index dropped 7 percent, continuing four days of decline.Related: China's Stock Markets Are Collapsing Again — And No One Knows What the Government Will DoNotably, the New York Stock Exchange employed Rule 48 — a rarely used measure — for the second time this week in order to calm markets before trading began on Tuesday. Rule 48 lifts regulations to post stock prices ahead of opening bell, and is meant to keep trading stable in times of market unrest and volatility. The measure was also used ahead of trading on Monday morning. The policy was passed in 2007, and it has only been utilized a handful of times since, according to CNBC.Chinese state media dubbed yesterday's decline "Black Monday," with the poor stock performance coming after a summer of market downturn in the country that hosts the world's second-largest economy. The Shanghai index has experienced a 40 percent drop off since the downfall began in June.On August 11, the People's Bank of China devalued the yuan, a move that Beijing said was meant to encourage market liberalization, though many commentators said was an attempt to resuscitate the country's faltering stock market and economy. China then devalued its currency for the next two consecutive days.China's move to a market-based economy in the 1970s transformed it into one of the world's largest and most influential countries in terms of industry. However, the World Bank still classifies it as a developing nation, with some 98.99 million of its 1.3 billion people living below the national poverty line in 2012. The Shanghai Composite index rose 140 percent in 2015.Related: Booze, Sex, and the Dark Art of Dealmaking in China
Advertisement