What was old was new again today.
An unexpected drop in the yuan and a sharp selloff in crude oil hammered stocks and reminded markets that the concerns of the past weeks remain very much alive. The dollar and yen rose in the currency markets.
U.S. equities fell from six-week highs with the Dow Jones Industrial Average losing 188.88 points, 1.14 percent to 16431.78.
Unitl today's open the Dow had gained 6 percent from the close on February 11th. This was the largest sustained rise in the average since it average lost 11 percent in first three weeks of the year.
Crude oil opened at $33.34 and rose to $33.53, its highest quote in almost two weeks. But prices reacted swiftly to statements from Saudi Arabia and Iran that the recent production agreement would not mean reductions in output from either nation. West Texas Intermediate closed down 5.9 percent on the day at $31.37, and continued lower in after-hours trading.
Earlier, equities in Europe and Asia sank after China’s central bank unexpectedly weakened the reference rate of the managed ‘on-shore' yuan in Shanghai, reigniting concerns that the world’s second largest economy is in worse condition that officially portrayed.
The 'off-shore' yuan which trades in Hong Kong closed at its weakest level against the dollar in two weeks.
The Japanese yen rose strongly on the safety trade to finish at 112.10 in New York, its highest close against the dollar in more than a year.