Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Wall Street Set to Plunge on China News

U.S. stock markets are primed for big losses today following declines in both Asia and Europe. As of 7:15 a.m. EDT, futures for the Dow Jones Industrial Average (DJINDICES: ^DJI  ) suggest that the index will fall 0.86% at the open, while the S&P 500 (SNPINDEX: ^GSPC  ) may open 0.95% lower.

The Shanghai Composite dropped an incredible 5.3% today as high interbank rates made investors fear a liquidity crunch in the world's second-largest economy. Goldman Sachs also lowered its growth expectations for China from 7.8% to 7.4% in 2013 and from 8.4% to 7.7% in 2014. China has been one of the few economies growing more than a nominal amount over the past five years, so slower growth would have a negative impact on economies worldwide. 

Europe is feeling the pressure from China, and all European stock markets are down 1% or more as of 8:10 a.m. EDT. But not everything in the market is so bearish today.

Companies are still looking for ways to expand, and there are a few acquisitions that should give investors a little hope. Vodafone (NASDAQ: VOD  ) agreed to buy Kabel Deutschland, Germany's largest cable operator, for $10.1 billion in an effort to expand in one of Europe's only healthy economies. Vodafone will expand its TV and fixed-line business and add them to the wireless services it already offers in the country.  

Tenet Healthcare (NYSE: THC  ) has agreed to pay $1.63 billion for Vanguard Health Systems (UNKNOWN: VHS.DL  ) , a 70% premium to Vanguard's close on Friday. The deal will diversify Tenet's offerings in acute care and specialty hospitals and give it a wider geographic reach as well. Tenet is up 8.4% in premarket trading, while Vanguard has skyrocketed 64%. 

Foolish bottom line
It doesn't look like a strong start to the week on Wall Street, and investors should be concerned about slowing growth in China. It's been one of the bright spots in the global economy, and slower growth will put pressure on the U.S. and Europe to pick up the slack or risk another recession.

Long-term investors should keep in mind that the day-to-day fluctuations on Wall Street don't impact the fundamental value of great companies, and a huge gain can come at any time. Vanguard's 70% premium is a prime example of that.

If you're looking for some long-term investing ideas, you're invited to check out The Motley Fool's brand-new special report, "The 3 Dow Stocks Dividend Investors Need." It's absolutely free, so simply click here now and get your copy today.

Read/Post Comments (2) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 24, 2013, at 9:20 AM, tbyrd58 wrote:

    Sounds like a buying opportunity to me.

  • Report this Comment On June 24, 2013, at 7:30 PM, optimist911 wrote:

    "... and a huge gain can come at any time. Vanguard's 70% premium is a prime example of that."

    That's wonderful. I suppose we should all depend on unpredictable outsized gains like this as part of of a prudent investment strategy.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2504935, ~/Articles/ArticleHandler.aspx, 9/28/2016 1:41:47 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,218.68 -9.62 -0.05%
S&P 500 2,158.28 -1.65 -0.08%
NASD 5,297.02 -8.70 -0.16%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/28/2016 1:26 PM
^DJI $18219.64 Down -8.66 -0.05%
^GSPC $2158.48 Down -1.45 -0.07%
S&P 500 INDEX CAPS Rating: No stars
THC $21.62 Down -0.06 -0.28%
Tenet Healthcare CAPS Rating: **
VHS.DL $0.00 Down +0.00 +0.00%
VOD $29.45 Up +0.18 +0.61%
Vodafone CAPS Rating: ****