Dow falls 614 points for worst day since July; S&P, Nasdaq mark worst days since May

Sept. 20 (UPI) — U.S. markets turned in their worst performances in months on Monday as investors were troubled by developments in Chinese markets.

The Dow Jones Industrial Average fell 614.41 points, or 1.78%, for its worst day since July 19, while the S&P 500 fell 1.7% as every sector reported losses for its worst daily performance since May 12. The Nasdaq Composite also fell 2.19%, which was also its worst performance since May.

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Investors mostly responded to news that Chinese real estate conglomerate Evergrande was on the brink of default.

Evergrande was struggling to manage its $300 billion in debt with interest on some of its loans due Monday as the company is set to pay interest on two of its bond worth more than $100 million later in the week.

The White House said it was monitoring the markets but noted Evergrande’s business was “overwhelmingly centered in China” as Ryan Detrick, a chief market strategist for LPL Financial, said the crisis was not likely to lead to a collapse.

“We think the odds do favor the Chinese communist government will get involved should there be a default,” said Detrick. “They are holding out as of now, but the fallout could be too great for them to avoid intervening.”

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Bank stocks struggled following the news as Bank of America fell 3.29% and JPMorgan Chase dropped 3.03%.

Stocks tied to global growth also turned in losses as Ford dropped 5.46%, General Motors stock declined 3.82% and Boeing closed down 1.81%.

Energy stocks also fell as West Texas Intermediate crude oil fell about 2%.

Monday’s sell-off briefly pushed the S&P 500 to 5% below its previous record on an intraday basis before markets bounced back near closing.

U.S. markets have struggled in a traditionally difficult September with the Dow falling 3.9%, the S&P 500 dropping 3.7% and the Nasdaq declining 3.6%.