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Dow closes down 588 points after tumultuous day

World stock markets plunged on Monday, Aug. 24,

World stock markets plunged on Monday, Aug. 24, 2015 after China's main index sank 8.5 percent, its biggest drop since the early days of the global financial crisis. Trader John Santiago works on the floor of the New York Stock Exchange shortly after it opened Monday. Photo Credit: AP / Richard Drew

U.S. stocks closed down nearly 4 percent Monday after a tumultuous day of early losses and a midday recovery that faded. The roller-coaster day started as the Dow Jones industrial average dived more than 1,000 points, and the Standard & Poor's 500 index slid to a near correction.

At the close on Wall Street, The Dow was down 588.4 points, about 3.6 percent, at 15,871.4. The S&P 500 lost 77.7 points, nearly 4 percent, to 1,893.2. The Nasdaq composite gave up 179.8 points, about 3.8 percent, to 4,526.3.

FREE FALL. All of the S&P 500's main groups tumbled, with raw-materials shares approaching a two-year low while energy companies slumped to the lowest since October 2011. Citigroup Inc. ended down 6.1 percent, and JPMorgan Chase & Co. fell 5.1 percent as banks retreated the most since March.

OIL PRICES. As the markets closed, the price of benchmark U.S. crude oil fell $2.15, or 5.3 percent, to $38.30 per barrel in trading on the New York Mercantile Exchange. Oil hasn't closed below $40 a barrel since February 2009.

THE QUOTE. "Investors in China have lost confidence in the central bank, and it's a very alarming and difficult situation for the markets," said Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird & Co., which oversees $110 billion. "It ultimately depends on whether the China situation results in a severe economic slowdown. It that happens, it's going to ripple through the U.S."

SHATTERED CALM. Calm in the U.S. market shattered two weeks ago, when China devalued its currency. Over the weeks, volatility soared by the most on record as the Dow entered a correction and investors dumped the biggest winners of 2015. A gauge of volatility expectations more than doubled last week. Shares succumbed to a global sell-off that's wiped more than $5 trillion off the value of equities around the world since China's shock currency devaluation on Aug. 11.

VIX FOR VOLATILITY. The Chicago Board Options Exchange Volatility Index rose 33 percent to 37.28, trimming an earlier 90 percent surge that temporarily sent the index to its highest level since January 2009. The gauge known as the VIX more than doubled last week, soaring 118 percent to 28.03.


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