US Stocks closed lower Monday after a big drop in Chinese shares heightened concerns that U.S. markets have risen too far, too fast. But August was a good month for Wall Street.
'September smack down.' September is historically the worst month for stocks and market participants are bracing for a possible pullback following a surprisingly strong summer advance.
Some analysts are saying "What worries me the most is this universal belief that the economic recovery is on strong footing. The past six-week move had a lot of people panicking in, with low volume and a lot more buyers than sellers, so it trended up."
The Dow Jones Industrial Average closed down 47.92, or half a per cent, at 9496.28. The Standard & Poor's 500 index declined 8.31, or 0.81 per cent, to 1020.62, while the Nasdaq composite index fell 19.71, or 0.97 per cent, at 2009.06.
LONDON - Stock markets in the UK were closed for a public holiday.
FRANKFURT - European stock markets closed lower, with nervous investors taking profits on concerns recent gains have been overdone and share prices are due for a substantial correction.
The DAX fell 52.74 points, or 0.96 per cent, to 5464.61. PARIS - The CAC 40 declined 39.6 points, or 1.07 per cent, to 3653.54.
The Australian share market may fall a little further on Tuesday after equity markets around the world slumped overnight on concerns about heavy losses in Chinese stocks on Monday.
At 0643 AEST on the Sydney Futures Exchange, the September share price index contract was four points lower at 4467.
In economic news on Tuesday, the Australian Industry Group and PricewaterhouseCoopers release their Australian Performance of Manufacturing Index (Australian PMI) for August.
The Australian Bureau of Statistics releases building approvals data for July and balance of payments and foreign debt data for the June quarter.
The ABS also releases government expenditures estimates for the June quarter.
The Reserve Bank of Australia holds its September board meeting and interest rate decision.
The RBA also releases its index of commodity prices for July.
Oil prices fell nearly four per cent to below $US70 a barrel as a steep drop in China's stock market raised doubts about the strength of the US and global economic recovery.
Benchmark crude for October delivery lost $US2.78 to settle at $US69.96 on the New York Mercantile Exchange, the first time oil has ended a trading day below $US70 in about two weeks.
Gold down 5.30 to US$953.50 an ounce Silver up 10.8c to US$14.923 an ounce Copper down 12.4c at US$2.8265 a pound
On Optimism & Pessimism - Optimism means expecting the best, but confidence mean knowing how you will handle the worst. Never make a move if you are merely optimistic.
