A rally in U.S. stocks ended in the minutes before the closing bell Tuesday, sending the Dow Jones industrial average down more than 200 points and extending Wall Street's losing streak to six days.
For most of the day, it appeared that the market had recovered from worries about the slowing economy in China, and at one point the Dow was up by as much as 441. But sell orders increased in the last 15 minutes of trading.
The Dow ended the day with a loss of 204.91 points, or 1.3 percent, at 15,666.44. The Standard & Poor's 500 index fell 25.60 points, or 1.4 percent, to 1,867.62. The Nasdaq composite declined 19.76 points, or 0.4 percent, to 4,506.49.
The rally came after China lowered interest rates to assist the world's second-biggest economy. Shares in other world markets rose on the news out of Beijing, and for a while, it appeared that U.S. stocks would follow suit and that the global selloff might end.
"The return to a more traditional stimulus from China helped excite many investors," said Jeff Kleintop, chief global investment strategist at Charles Schwab. "But, in fact, this is more likely the start of a longer-term period of volatility."
The three major U.S. indexes have declined six days in a row, with the Dow falling about 1,900 points over that period.
The 10 sectors in the S&P 500 declined, with utilities falling the most, 3.2 percent. The sector is down 5.8 percent this year. It is also undergoing what Wall Street calls a "correction" -- a drop of at least 10 percent from its most recent high.
China cut its interest rates for the fifth time in nine months in a renewed effort to promote economic growth. The central bank also increased the amount of money available for lending by reducing the reserves banks are required to hold.
Analysts said that while Tuesday's actions by China may ease stock market turmoil for now, the country faces a period of uncertainty.
"The Chinese economy is going to be on this bumpy road for a while, and it will have ebbs and flows that will no doubt have a serious impact on the global economy," said Kamel Mellahi, professor at the Warwick Business School. "What we are seeing now is a dress rehearsal of things to come."
Investors are trying to determine if a deeper global economic slowdown is coming, given recent discouraging economic data out of China and the government's surprise devaluation of its currency, the yuan, this month.
A slowdown in China has the potential to significantly crimp demand for oil and other commodities, a ripple effect that could dampen global economic growth.
Beyond China, traders are waiting for the Federal Reserve to make a decision about raising its key interest rate. The Fed won't announce a policy update until its next meeting on Sept. 17.
European markets recovered almost all their losses from Monday. Germany's DAX rose 5 percent, while France's CAC-40 rose 4.1 percent. The FTSE 100 index of leading British shares gained 3.1 percent.
China's central bank took action hours after the country's main stock index closed lower for a fourth day. The Shanghai stock index slumped 7.6 percent, on top of Monday's 8.5 percent loss.
Tokyo's Nikkei 225 also closed lower, sliding 4 percent. But other markets in Asia posted modest recoveries. Hong Kong's Hang Seng index rose 0.7 percent, while Sydney's S&P ASX 200 gained 2.7 percent.
Energy company Pepco Holdings declined the most in the S&P 500 on Tuesdsay after regulators in Washington rejected its proposed merger with Exelon. Pepco's stock shed $4.44, or 16.5 percent, to $22.51.
Best Buy recorded the biggest gain in the index, climbing $3.68, or 12.6 percent, to $32.95, after the home electronics chain reported better-than-expected results for the quarter.
Oil rebounded from its lowest closing level in more than six years.
The price of U.S. crude rose $1.07, or 2.8 percent, to $39.31, its biggest one-day gain since June 9. Brent crude, a benchmark for international oils used by many U.S. refineries, gained 52 cents, or 1.2 percent, to $43.21.
Natural gas and heating oil prices also rose, and wholesale gasoline dropped.
U.S. government bond prices fell, pushing up the yield on the 10-year Treasury note to 2.13 percent.
Information for this article was contributed by Joe McDonald of The Associated Press.
Business on 08/26/2015