Stocks fell sharply on Tuesday giving up about 1 percent as China's currency devaluation raised concern across global markets that the world's second-largest economy is heading for a deeper slowdown.
At the end of trading on Wall Street, the Standard & Poor's 500 index was down 20.1 points, about 1 percent, at 2,084.1. The Dow Jones industrial average was down 212.3, about 1.2 percent, at 17,402.8. The Nasdaq composite was down 65 points, about 1.3 percent, at 5,036.8.
DEATH CROSS: The Dow biggest decline in a month appears to be the final nail in its death cross. That's what technical analysts call it when the 50-day moving average falls below the 200-day mean, a formation that was achieved Tuesday as the index declined for the eighth time in nine days. The pattern is commonly interpreted as a signal price momentum is fizzling out.
CRUDE ENERGY: The price of benchmark U.S. crude oil, which buoyed the markets Monday, was down $1.57 at $44.09 a barrel in trading at midmorning Tuesday on the New York Mercantile Exchange.
CHINA'S DEVALUATION: Beijing's move allowed the yuan to fall 1.9 percent, the biggest one-day drop in a decade. In recent months, the yuan has strengthened along with the U.S. dollar, hurting Chinese exporters. China's exports fell by an unexpectedly large 8.3 percent in July. The People's Bank of China said market forces would be given a bigger role in setting the exchange rate, leaving open the possibility of more declines. China's yuan was valued at 6.32 per dollar on Tuesday, compared with 6.21 per dollar a day earlier.
Companies that rely heavily on exports to China, including auto and luxury goods makers, retreated. A lower value yuan reduces the value of their goods. General Motors Co. closed down by about 3.5 percent and Tiffany & Co. lost about 2 percent. Apple Inc. sank 5.2 percent. Commodity producers from Freeport-McMoRan Inc. lost about 12.3 percent and to Dow Chemical Co. sank about 2.8 percent.
ALL ABOUT THE FED: The unexpected move by China's policymakers bolstered speculation the U.S. Federal Reserve may have to delay raising rates, as the threat of a slowdown in China could harm global growth, while lower commodity prices damp inflation. The probability of a rate increase in September slipped to 46 percent from 54 percent Monday, according to futures trading data compiled by Bloomberg.
NOT SO TASTY: Yum Brands, the owner of the KFC and Taco Bell chains, was among the biggest decliners in the S&P 500. The fast-food company gets more than half of its sales from China, according to data from FactSet. The company said last month that it was expecting a strong second-half of the year in China. Yum closed down $4.28, about 5 percent, at $83.54.
FLYING HIGH: Airlines were among the biggest gainers as oil prices fell again. Fuel is one of the biggest expenses for airlines and lower fuel costs typically mean higher profits for airlines.
GREECE DEAL: Greece says it has reached an agreement with its international creditors on the broad terms of a new bailout deal. The news pushed Greek stocks up 2 percent and sent yields on Greek government bonds sharply lower, an indication investors are less worried about a default.
Reports from Bloomberg News and The Associated Press were used in this story.