NEW YORK – Another drop in China's currency sent global stocks lower on Wednesday as the move raised worries about weakness in the world's second-largest economy.
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KEEPING SCORE: The Dow Jones industrial average lost 188 points, or 1.1 percent, to 17,214 as of 10 a.m. Eastern time. The Standard & Poor's 500 index fell 20 points, or 0.9 percent, to 2,064, and the Nasdaq composite lost 55 points, or 1.1 percent, to 4,982.
CHINA: China's government said the devaluation of the yuan was part of reforms aimed at making its exchange rate more responsive to the market. But the decision has added to worries over slowing growth in the world's second-largest economy. The Chinese yuan's market rate fell 1.8 percent after Tuesday's nearly 2 percent fall, the biggest drop in a decade.
NOT ENOUGH: Alibaba Group slumped after posting sales that fell short of Wall Street's high expectations, even though first-quarter income for China's top internet retailer more than doubled. Alibaba's stock dropped $5.10, or 7 percent, to $72.21.
NO PARADE: Macy's reporting a drop in quarterly profits and sales on Wednesday, as the department-store chain was hobbled by weak tourist spending and delays at West Coast ports. Its stock lost $2.57, or 3.9 percent, to $64.97.
EUROPE: Major markets in Europe continued their slide. Germany's DAX dropped 2.9 percent, France's CAC 40 dropped 3.1 percent, while Britain's FTSE 100 lost 1.4 percent.
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RESPONSE: The International Monetary Fund welcomed Beijing's move to loosen its exchange rates. Many investors saw it as an attempt to stimulate a slowing economy, as a cheaper yuan benefits China's exports by making them less expensive to overseas customers. The devaluation triggered selling of copper and other commodities on expectations of waning demand from Chinese buyers.
THE QUOTE: "Markets were not expecting any major moves on the currency from the Chinese government, despite its benefits, as the risks were perceived as too high. Now that this Rubicon has been crossed, keen attention should be paid to any other significant moves to prop up the Chinese economy," Angus Nicholson, a market analyst at IG, said in a commentary.
ASIAN SCORECARD: China's move battered Asian markets for a second day running. Japan's Nikkei 225 fell 1.6 percent and Hong Kong's Hang Seng dropped 2.4 percent. South Korea's Kospi lost 0.6 percent and Australia's S&P/ASX 200 slipped 1.7 percent. The Shanghai Composite Index fell 1.1 percent.
ENERGY: U.S. crude oil rose 57 cents to $43.65 a barrel on the New York Mercantile Exchange, bouncing off a six-year low reached Tuesday.
BONDS, CURRENCIES: U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 2.12 percent. The dollar fell to 123.94 yen from 125.18 yen the previous day. The euro rose to $1.1188 from $1.1047.