U.S. stocks and exchange traded funds (ETFs) followed Asian markets and opened up in negative territory this morning as many investors wait on key economic figures on manufacturing and unemployment, which will be released later in the week.
The massive selloff was led by the Shanghai Composite Index, which tumbled 6.7% and entered a bear market. According to Lynn Thomasson and Adria Cimino of Bloomberg, the index is the worst performer this month among 89 benchmark indexes. In August, the index lost nearly 22%.
In more encouraging news, the Institute for Supply Chain Management-Chicago said that its business barometer rose to its highest level since September 2008. The Index in August rose to 50, which is the dividing line between contraction and expansion. Courtney Schlisserman of Bloomberg states that the index also showed gains in orders and an improvement in its employment index.
One of the world’s largest entertainment companies, Walt Disney (DIS), announced it is buying Marvel Entertainment (MVL) for $4 billion in cash and stock, which many believe will enable Disney to grab exposure to a broader viewing audience. Despite the news, the PowerShares Dynamic Media (PBS) was down nearly 0.2% in morning trading.
In other news, oilfield services company Baker Hughes (BHI) announced that it will buy BJ Services Co. (BJS) in a cash and stock deal worth an estimated $5.5 billion. The deal marks the first major oil services takeover for the year.
Overall, all three major U.S. indexes were down in morning trading. The Dow Jones Industrial Average dropped 0.8%, the S&P 500 gave up 1% and the Nasdaq was down 1.1%.
For more stories on China, visit our China category.
Kevin Grewal contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.