Wall Street stages dramatic comeback as Apple rebounds

Apple Pares Loss as Silicon Valley Stocks Stage Comeback

(REUTERS) -- U.S. stocks staged a stunning recovery off their lows on Monday, helped by a sharp turnaround in Apple's shares, but were still down about 2 percent in afternoon trading.

The Dow Jones industrial average briefly slumped more than 1,000 points, its biggest point-drop ever.
But by 13:05 ET, the Dow was down just 143 points, or 0.87 percent as bargain hunters stepped in.
The Dow has never lost more than 800 points in a day.

The morning rout followed an 8.5 percent decline in Chinese markets, which sparked a selloff in global stocks along with oil and other commodities.

Chinese stocks fell 11 percent last week raising hopes that Beijing would move again to support the market. That didn't happen.

"There was some panic selling that came out of Europe and the selloff was overdone but a lot of institutional investors are seeing this as a buying opportunity," said Michael Joyce, President of JoycePayne Partners.

See the reactions from this morning's drop on social media:

Black Monday stock market reaction on social media
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Wall Street stages dramatic comeback as Apple rebounds
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. http://t.co/xbDSkUFuv7
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 http://t.co/xRbtPolKBW
Shockwaves from #BlackMonday pushing Australia 1000s of miles northwards. Expected to hit Alaska by close of markets. http://t.co/bF3XdnR8nR
When a system is completely built on gambling, a day of giant loses is to be expected. #BlackMonday
Right before #NYSE opening bell. #BlackMonday http://t.co/uF8Sf0YKdo
Even Neopets is getting hit hard by #BlackMonday http://t.co/lxwTwHAgVD
Fair to say that ex-Gordon Brown advisor @DPMcBride is somewhere between "nervous" and "concerned" #BlackMonday http://t.co/iEzV9UZNfA
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 http://t.co/Ul5y8ziGKj
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

Apple, which slid as much as 13 percent, reversed course to trade up 1.3 percent at $107.15 by 1:30 p.m. ET.

Apple's dramatic turnaround helped the Nasdaq composite and the S&P 500 indexes pull away from levels that would have put them into correction mode. An index is considered to be in correction when it closes 10 percent below its 52-week high.

At 13:15 ET the Dow Jones industrial average was down 156.67 points, or 0.95 percent, at 16,303.08, the S&P 500 was down 22.54 points, or 1.14 percent, at 1,948.35 and the Nasdaq composite was down 25.89 points, or 0.55 percent, at 4,680.15.

Nine of the 10 major S&P 500 sectors were down, with energy and finance losing about 1.5 percent. At one point, all 30 stocks on the Dow and more than 90 percent of the S&P 500 stocks were at least 10 percent below their 52-week highs.

More on the market:
McNamee: 'Not a Bottom, Just a Healthy Scare'

The CBOE Volatility index .VIX, popularly known as the "fear index", jumped as much as 90 percent to 53.29, its highest since January 2009.

The S&P 500 index showed 185 new 52-week lows and just two highs, while the Nasdaqrecorded 589 new lows and seven highs.

"I think emotions got the best of investors," said Philip Blancato chief executive at Ladenberg Thalmann Asset Management in New York.

"The conjecture that the Chinese economy can propel the U.S. economy into recession is ridiculous when it's twice the size of the Chinese economy and is consumer based."

U.S. oil prices were down about 4 percent at 6-1/2-year lows, while London copper and aluminum futures hit their lowest since 2009.

Oil majors Exxon and Chevron recovered somewhat to trade down about 1.5 percent, having fallen more then 6 percent earlier. U.S. oil and gas companies have already lost about $310 billion of market value this year.

The dollar index .DXY was down 1.7 percent. It fell more than 2 percent earlier to a 7-month low as the probability of a September rate hike receded.

Traders now see a 24 percent chance that the Federal Reserve will increase rates in September, down from 30 percent late on Friday and 46 percent a week earlier, according to Tullett Prebon data.

Wall Street's selloff shows investors are becoming increasingly nervous about paying high prices for stocks at a time of minimal earnings growth, tumbling energy prices, and uncertainty around a rate hike.

Alibaba was down about 3 percent at $66.15, below its IPO price of $68, making it the second high-profile tech company to fall below its IPO price in the past week after Twitter on Thursday.

Futures on the Nasdaq, S&P and Dow indexes were halted briefly before the market opened after hitting a circuit breaker, a step taken by exchanges to reduce volatility and give investors time to assess information.

The New York Stock Exchange invoked a rarely used rule saying market makers don't have to disseminate price indications before the opening bell in an effort to make it easier and faster to open stocks on a volatile trading day.

Declining issues outnumbered advancers on the NYSE by 2,705 to 448. On the Nasdaq, 2,143 issues fell and 713 advanced.

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