The stock market recovered much of a nearly swoon caused by the latest signs of distress in China’s economy and rising U.S. bond yields.
The Dow Jones industrial average fell 139 points, or 0.9 percent, to close at 14,659 Monday. It was down as much as 248 in the first hour of trading.
The Standard & Poor’s index fell 19 points, or 1.2 percent, to 1,573. The Nasdaq composite fell 36 points, or 1.1 percent, to 3,320.
An increase in China’s commercial lending rates worried investors. The Shanghai Composite Index plunged 5 percent.
The yield on the 10-year Treasury note rose to its highest level in almost two years.
Seven stocks fell for every one that rose on the New York Stock Exchange. Volume was heavy at 4.7 billion shares.
The turbulence is another a sign of how vulnerable financial markets remain to any comments from the Fed about its $85 billion in monthly bond purchases, which have kept interest rates at historic lows and helped drive the stock market’s rally the last four years.
On Wednesday and Thursday, the S&P plunged 3.9 percent after the central bank said its bond-buying program could wrap up by the middle of next year as long as economic conditions continue to improve. Stocks edged up Friday, but still had their worst week in two months. Worries about China’s growth and tighter lending conditions have also contributed to the market’s fall since last Thursday.
Investors are nervous about what exactly the Fed is trying to say, said Janet Engels, senior vice president and director of the private client research group at RBC Wealth Management. And then with China, “now we question whether the second-largest economy in the world is going to grow at the rate that everyone had expected. The view is that everything that we thought to be true, now we need to question.”
She said the U.S. stock decline “probably has further to go.”