Stocks Retreat After China Market Drop

Stocks Retreat After China Market Drop
Wednesday May 30, 9:44 am ET
By Joe Bel Bruno, AP Business Writer
Stocks Fall After Drop in Chinese Stocks, Ahead of Fed Minutes


NEW YORK (AP) -- Wall Street retreated in early trading Wednesday as investors around the world reacted to a plunge in China's stock market, and awaited the release of minutes from the last Federal Reserve meeting.
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The pullback in the U.S. wasn't seen as a surprise as stocks were perhaps overdue for a consolidation after a strong run since the second half of 2006. And the declines in Asian and European markets did not appear as dramatic as on Feb. 27, when investors around the world recoiled at a 9 percent slide in the Shanghai index.

The tumble in Chinese stocks rippled through the global markets. When Beijing tripled a tax on stock trading to cool the country's market boom, the main Shanghai Composite Index dropped 6.5 percent and the Shenzhen Composite Index for China's smaller second market slid 7.2 percent.

Investors also retrenched ahead of the Fed minutes, which Wall Street hopes will indicate that policy makers are leaning more toward a rate cut by the end of the year than a rate hike. The minutes will be released at 2 p.m. EDT.

In the first hour of trading, the Dow Jones industrial average fell 52.25, or 0.39 percent, to 13,469.09.

Broader stock indicators were also lower. The Standard & Poor's 500 index was down 6.22, or 0.41 percent, at 1,511.89, and the Nasdaq composite index dropped 16.31, or 0.63 percent, to 2,555.75.


Source: http://biz.yahoo.com/ap/070530/wall_street.html?.v=14