China stock plunge hits world stocks, dollar; US stabilizes

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(Reuters) -- World stock markets plunged on Monday, after a near 9 percent dive in China shares and a sharp drop in the dollar and major commodities sent investors rushing for the exits.

After dropping more than 1,000 points, or almost 7 percent, at Wall Street's open, the Dow Jones industrial average eased losses but was still off more than 1 percent at midday. The Standard & Poor's 500 index was down by a similar margin after the U.S. benchmark earlier dropped nearly 10 percent below its record.

A key measure of U.S. equity volatility, the CBOE Volatility Index, or VIX, shot above the 50 mark for the first time since 2009, and the New York Stock Exchange was forced to implement special price-indication measures to allow for a more fluid start to trading.

Click through to read some of the best reaction on social media:

Black Monday stock market reaction on social media
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China stock plunge hits world stocks, dollar; US stabilizes
Don't panic. Hold your nerve. Sweat it out. Etc. Jeez. #BlackMonday
It's a good day to own nothing #blackmonday
Funny to call it #BlackMonday when entire market is in the red.
#BlackMonday Stock market crashing bigtime - just bought entire Exxon Corporation for $572. Want me to name an oil well after you?
#BlackMonday Is there a stock I can buy that is responsible for red fonts?! That seems like a winner today.
Since many working Americans don't have "portfolios" and spend everything they earn this is just another underpaid Monday. #BlackMonday
We're going to need a lot more panda cub pix on Twitter to offset this China despair (some calling it #GreatFallOfChina)
What TD Ameritrade is trying to tell everyone trying to access their accounts right now. #BlackMonday
Shockwaves from #BlackMonday pushing Australia 1000s of miles northwards. Expected to hit Alaska by close of markets.
When a system is completely built on gambling, a day of giant loses is to be expected. #BlackMonday
Right before #NYSE opening bell. #BlackMonday
Even Neopets is getting hit hard by #BlackMonday
Fair to say that ex-Gordon Brown advisor @DPMcBride is somewhere between "nervous" and "concerned" #BlackMonday
To everyone losing money this #BlackMonday just remember....theres always money in the banana stand ;)
The irony is that many of these stocks probably need to go much lower before they can be considered a ‘bargain.’ #BlackMonday
You know it's going to be a bad day for stocks when #BlackMonday is the top trend in the U.S. and the markets don't open for 2 more hours.
Candid snap shot of Wall Street. #BlackMonday
Who put Lord Grantham in charge of the stock markets? #BlackMonday
I love when the stock market crashes and every news article shows a picture of a rich white man in distress #BlackMonday
World markets suffering from severe depression symptoms.No positives,no future,Neg cycle.Will the markets commit suicide #greatfallofchina

Concerns about a China-led global economic slowdown and tumbling commodities prices had U.S. traders fearing the worst after a 5 percent decline in the both the S&P and Dow last Thursday and Friday.

"Anybody with a pulse was nervous when the market opened. We're still going to see significant price swings both up and down before the day ends today," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. "The only thing that's certain is the volatility is going to continue in the short term, given the magnitude of the moves that we've already had in the last four days."

Apple CEO Tim Cook sends message to CNBC's Jim Cramer:

Shortly after noon ET, the Dow Jones industrial average was down 219.88 points, or 1.34 percent, to 16,239.87, the S&P 500 lost 28.04 points, or 1.42 percent, to 1,942.85 and theNasdaq Composite dropped 36.64 points, or 0.78 percent, to 4,669.40.

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European stocks closed off 5.4 percent after Asian shares slumped to 3-year lows when a three month-long rout in Chinese equities threatened to get out of hand.

Oil plunged to six-and-a-half year lows, while safe-haven U.S. government and German bonds, as well as the yen and the euro, rallied as currency concerns kicked in due to China's recent currency devaluation.

Many traders had hoped Beijing would have taken support measures, such as an interest rate cut, over the weekend after China's main stocks markets slumped 11 percent last week.

With serious doubts emerging about the likelihood of a U.S. interest rate rise this year, the dollar slid 1.6 percent against other major currencies.

The Australian dollar fell to more than six-year lows and many emerging market currencies also plunged, while the frantic dash to safety pushed the euro to a seven-and-a-half month high above $1.17.

"Things are starting look like the Asian financial crisis in the late 1990s. Speculators are selling assets that seem the most vulnerable," said Takako Masai, head of research at Shinsei Bank in Tokyo.

U.S. crude was last down 3.9 percent at about $38.85 a barrel and Brent fell 4.3 percent to $43.51 to take it under January's lows for the first time as concerns about a global supply glut added to worries about weaker demand from the normally resource-hungry China.

Copper, seen as a barometer of global industrial demand, hit a six-year low, as did Nickel.

Watch more coverage below:

Cramer: Tomorrow May Be Better


The near 9 percent slump in Chinese stocks was their worst performance since the depths of the global financial crisis in 2007 and wiped out what was left of 2015's gains, which in June were at more than 50 percent.

With the latest slide rooted in disappointment that Beijing did not announce policy support over the weekend, all index futures contracts slumped by their 10 percent daily limit, pointing to more bad days ahead.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 5.4 percent to a more than three-year low. Tokyo's Nikkei ended down 4.6 percent and Australian and Indonesian shares hit two-year troughs.

London's FTSE 100, with its large number of global miners and oil firms, closed down 4.7 percent for its 10th straight decline - its worst run since 2003.

"We are in the midst of a full-blown growth scare," strategists at JP Morgan Cazenove said in a note.

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