Stocks, oil tumble as China economy concerns mount

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China's Stock Market Ceased Trading Today After Only 15 Minutes

Shares on major exchanges fell for a sixth consecutive day on Thursday and crude prices touched multi-year lows as investors fretted over the state of the Chinese economy and its ability to stabilize its stock market.

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China suspended a circuit breaker set up at the start of 2016 that stopped trading for the day when stocks fell 7 percent, a halt that had already triggered twice this week.

Analysts and investors said the mechanism, put in place to avoid market volatility, may have backfired.

Images related to China's stock market:

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Stocks, oil tumble as China economy concerns mount
LIANYUNGANG, Jan. 7, 2016-- A bank staff member checks RMB banknotes at a bank in Lianyungang, east China's Jiangsu Province, Jan. 7, 2016. The central parity rate of the Chinese yuan against the U.S. dollar weakened to 6.5646 per dollar on Jan. 7, the lowest since March 2011. (Xinhua/Si Wei via Getty Images)
A woman reacts near a display board showing the plunge in the Shanghai Composite Index at a brokerage in Beijing, China, Thursday, Jan. 7, 2016. Chinese stocks nosedived on Thursday, triggering the second daylong trading halt of the week and sending other Asian markets sharply lower as investor jitters rippled across the region. (AP Photo/Ng Han Guan)
Chinese pedestrians walk past a giant U.S. dollar note on a display board of a bank in Beijing, China, Thursday, Jan. 7, 2016. This weekâs plunge in Chinese stocks was fueled by concern Beijing is letting Chinaâs currency, the yuan, weaken too fast against the U.S. dollar. (AP Photo/Ng Han Guan)
SHENYANG, Jan. 7, 2016-- An investor looks through stock information at a trading hall of a securities firm in Shenyang, capital of northeast China's Liaoning Province, Jan. 7, 2016. Trading was halted for the day on the Shanghai and Shenzhen stock markets Thursday morning after shares tumbled over 7 percent as the circuit breaker mechanism was triggered. (Xinhua/Yang Qing via Getty Images)
Investors look at screens showing stock market movements at a securities company in Beijing on January 7, 2016. Chinese markets were suspended on January 7 for the second day this week after they fell more than seven percent, leading an Asia-wide sell-off as China weakened the value of the yuan currency by the most since August. AFP PHOTO / FRED DUFOUR / AFP / FRED DUFOUR (Photo credit should read FRED DUFOUR/AFP/Getty Images)
Investors look at screens showing stock market movements at a securities company in Beijing on January 7, 2016. Chinese markets were suspended on January 7 for the second day this week after they fell more than seven percent, leading an Asia-wide sell-off as China weakened the value of the yuan currency by the most since August. AFP PHOTO / FRED DUFOUR / AFP / FRED DUFOUR (Photo credit should read FRED DUFOUR/AFP/Getty Images)
HANGZHOU, CHINA - JANUARY 07: (CHINA OUT) An investor reacts at a stock exchange hall on January 7, 2016 in Hangzhou, Zhejiang Province of China. Chinese shares slumped to a halt in half an hour on Thursday which was the second halt in the four trading days of 2016. The Shanghai Composite Index fell 245.96 points, or 7.32 percent, to halt at 3,115.89. (Photo by ChinaFotoPress/ChinaFotoPress via Getty Images)
HANGZHOU, CHINA - JANUARY 07: (CHINA OUT) An investor reacts at a stock exchange hall on January 7, 2016 in Hangzhou, Zhejiang Province of China. Chinese shares slumped to a halt in half an hour on Thursday which was the second halt in the four trading days of 2016. The Shanghai Composite Index fell 245.96 points, or 7.32 percent, to halt at 3,115.89. (Photo by ChinaFotoPress/ChinaFotoPress via Getty Images)
BEIJING, CHINA - JANUARY 06: (CHINA OUT) Investors observe stock market at an exchange hall on January 6, 2016 in Beijing, China. Chinese stock market rebounded after two days' decline. The Shanghai Composite Index rose 22.53 points, or 0.69% to 3310.24 points and Shenzhen Composite Index ran up 45.83, or 0.40% to 11513.89 points. (Photo by ChinaFotoPress/ChinaFotoPress via Getty Images)
FUYANG, CHINA - JANUARY 06: (CHINA OUT) An investor observes stock market at an exchange hall on January 6, 2016 in Fuyang, Anhui Province of China. Chinese stock market rebounded after two days' decline. The Shanghai Composite Index rose 22.53 points, or 0.69% to 3310.24 points and Shenzhen Composite Index ran up 45.83, or 0.40% to 11513.89 points. (Photo by ChinaFotoPress/ChinaFotoPress via Getty Images)
FUYANG, CHINA - JANUARY 06: (CHINA OUT) An investor observes stock market at an exchange hall on January 6, 2016 in Fuyang, Anhui Province of China. Chinese stock market rebounded after two days' decline. The Shanghai Composite Index rose 22.53 points, or 0.69% to 3310.24 points and Shenzhen Composite Index ran up 45.83, or 0.40% to 11513.89 points. (Photo by ChinaFotoPress/ChinaFotoPress via Getty Images)
FUYANG, CHINA - JANUARY 05: (CHINA OUT) An investor observes stock market at an exchange hall on January 5, 2016 in Fuyang, Anhui Province of China. Following the dropping on Monday on the first day of the year 2016, the Shanghai Composite Index declined 2.89% to nearly 3,199 points and the Shenzhen Composite Index fell 4.56% to nearly 11,088 points. (Photo by ChinaFotoPress/ChinaFotoPress via Getty Images)
HUAIBEI, CHINA - JANUARY 05: (CHINA OUT) A man carries a bucket of water at an exchange hall on January 5, 2016 in Huaibei, Anhui Province of China. Following the dropping on Monday on the first day of the year 2016, the Shanghai Composite Index declined 2.89% to nearly 3,199 points and the Shenzhen Composite Index fell 4.56% to nearly 11,088 points. (Photo by ChinaFotoPress/ChinaFotoPress via Getty Images)
HUAIBEI, CHINA - JANUARY 05: (CHINA OUT) Two investors talk as they observe stock market at an exchange hall on January 5, 2016 in Huaibei, Anhui Province of China. Following the dropping on Monday on the first day of the year 2016, the Shanghai Composite Index declined 2.89% to nearly 3,199 points and the Shenzhen Composite Index fell 4.56% to nearly 11,088 points. (Photo by ChinaFotoPress/ChinaFotoPress via Getty Images)
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In a move that deepened concerns over China's economic health, the People's Bank of China (PBOC) set the yuan midpoint rate lower for an eighth consecutive day. The 0.5 percent decline was the biggest between daily fixings since August.

"People see the weakness in China and in the overall equity market and think there's going to be an impact on corporations here in the United States," said Robert Pavlik, chief market strategist at Boston Private Wealth in New York.

The Dow Jones industrial average .DJI fell 388.34 points, or 2.3 percent, to 16,518.17 in what could be its worst start to a year in more than a century.

The S&P 500 .SPX lost 45.09 points, or 2.27 percent, to 1,945.17 and the Nasdaq Composite .IXIC dropped 130.87 points, or 2.71 percent, to 4,704.90.

The pan-European FTSEurofirst 300 index .FTEU3 and the euro zone's blue-chip Euro STOXX 50 .STOXX50E index closed down 2.3 percent and 1.7 percent, respectively.

A gauge of major stock markets globally .MIWD00000PUS fell 1.9 percent and Nikkei futures NKc1 were down 2.6 percent.

CURRENCY WAR BREWING

Investors fear China's economy is even weaker than had been imagined, with Beijing, in a bid to help exporters, allowing the yuan's depreciation to accelerate. The move risks triggering a cycle of competitive devaluation, said Mexican Finance Minister Luis Videgaray.

This graphic shows how currencies, stocks, commodities, bonds and some economic indicators have reacted to the yuan decline since August: reut.rs/1VMvXYf

The U.S. dollar tumbled 1 percent against a basket of currencies .DXY, losing 1.5 percent to $1.0937 against the euro EUR= and 0.8 percent to the yen JPY= at 117.48.

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Brent crude cut a loss of more than 6 percent to trade down 1.6 percent, while U.S. crude CLc1, down as much as 5.5 percent earlier, was down 2.3 percent.

The benchmark U.S. Treasury yield US10YT=RR touched its lowest since late October. U.S. 10-year Treasury notes were last up 8/32 in price to yield 2.1491 percent from 2.177 percent late on Wednesday.

Gold climbed above $1,100 an ounce for the first time in nine weeks as the dollar fell and investors rushed into perceived havens. Spot gold XAU= was last up 1.3 percent at $1,109 an ounce. Its 4.6 percent gain so far this week is the best four-day run for gold in a year.

(Reporting by Rodrigo Campos, additional reporting by Caroline Valetkevitch; Editing by Nick Zieminski and Meredith Mazzilli)

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