Markets slammed again as China data spark global growth fears by Reuters @FortuneMagazine September 1, 2015, 4:21 PM EDT E-mail Tweet Facebook Linkedin Share icons Wall Street shares fell sharply again Tuesday, pushing all three major U.S. indexes firmly into losses for the year after weak data from China intensified fears that a stumble in the world’s second-largest economy will hobble global growth. The Dow Jones industrial average closed the day down 470 points, or 2.8%, while the S&P 500 lost 58 points, or 3%. The tech-laden Nasdaq Composite dropped 140 points, or 2.9%. All three major U.S. stock indexes are now in negative territory for the year. The broad S&P 500 is now down 6.6% for the year so far. Oil prices settled down sharply, with Brent falling back below $50 a barrel on concerns about global demand for petroleum and ending a three-day rally that pushed crude up more than 20 percent. The CBOE Volatility index, known as Wall Street’s “fear gauge,” was up 17.8 percent at 33.48, above its long-term average of 20. The index had spiked to 53.29 last Monday. The moves followed a stormy week in the markets, when investors became increasingly concerned about further losses due to slowing growth in China. The selloff has raised doubts about earnings growth while also fueling worries about whether central bank support could make a difference after years of loose policy around the globe. Comments by Federal Reserve Vice Chairman Stanley Fischer over the weekend appeared to keep alive chances of a U.S. interest rate increase in September. Sparking Tuesday’s selloff, surveys showed China’s manufacturing sector shrinking at its fastest pace in three years while its services sector also cooled. Adding to investor jitters, data showed U.S. factory activity hit a more than two-year low in August. “It’s general risk aversion manifesting itself after a really bad August,” said Mohannad Aama, managing director, Beam Capital Management LLC in New York. “The continued uncertainty about China is definitely adding to worries.” European shares sank. Asian stocks, particularly in Japan, fell overnight. The dollar sagged against the safe-haven yen and low-yielding euro as the Chinese data drove investors to unwind bets against the two currencies widely used to fund positions in riskier assets. The head of the International Monetary Fund, Christine Lagarde, summed up the global outlook in a speech in Indonesia, where she said global economic growth was now likely to be weaker than had been expected just a few months ago. She cited a slower recovery in major advanced economies and a further slowdown in emerging nations and highlighted the need to “be vigilant for spillovers” from China’s stutters.