Dow Jones Industrial Average Tumbles 200 Points After Yuan Extends Slide

The best performers of the session on the Dow Jones Industrial Average were Caterpillar Inc (NYSE:CAT), which rose 3.71% or 2.87 points to trade at 80.16 at the close. The S&P 500 fell by 5.99 points to 2077.57 & the NASDAQ composite fell by 12.90 points to 5043.54.

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The Dow Jones fell by 46.37 points to 17373.38.

KraftHeinz fell 1.0 percent as it said it would trim 2,500 US and Canadian jobs following the merger of the two food giants.

The Dow (INDEXDJX:.DJI) tumbled 207.01 points, or 1.19 percent, to 17,195.83. Shire fell 5.4 per cent. Baxalta rejected the offer, saying it “significantly undervalues” the company.

Petroleum-linked stocks including Dow member ExxonMobil (+0.7 percent) and Apache (+1.7 percent) advanced on higher oil prices.

Monday’s big gains seem like a distant memory now, as China’s devaluation of its currency continues to rattle the market.

The yuan selloff continued to weigh on global stocks, with China’s Shanghai Composite index closing down 1 percent. Meanwhile, inflation rose 1.6% in July, which is well below the government’s annual target of 3% and producer prices hit their lowest level since 2009. European equities also traded lower as the pan-European Stoxx 600 declined more than 2 percent at the open. Results in the second quarter were marred by the strong US dollar.

The U.S. market has remained range-bound for much of 2015 in anticipation of the Fed’s first rate hike in nearly 10 years.

Unlike yesterday though, commodity prices and currency are moving higher (the AUD has reversed +1.4% off its lows) despite the further decline in CNY.

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The devaluation will make Chinese language-made items low-priced in worldwide markets, and imports to China costlier, which buyers worry might have destructive implications for U.S. multinationals – and the U.S. financial system. The yield for 10 year notes did decline however to 2.17%.

S Specialist traders work at their post on the floor of the New York Stock Exchange