Dow Drops 392 Points Amid Worries About Slowdown In China

NEW YORK (CBSNewYork/AP) -- The Dow Jones industrials dropped almost 400 points Thursday, and oil prices also plunged – amid more worries about a slowdown in China.

As CBS2's Dick Brennan reported, the Dow dropped 392 points, or 2.3 percent, to 16,514 on Thursday -- rubbing salt on the wounds of a rough week. Since Monday, the index has dropped more than 900 points.

The sell-off on Thursday hit shares in nearly all industries in the U.S., but it was the Chinese economy spurring the dive.

The price of oil also sank to its lowest level in 12 years Thursday.

Circuit breakers in the Chinese stock market suspended trading there after the market lost 7 percent, so as to protect the market from crazy volatile moves. But authorities quickly realized the shutdown may have triggered more panic, and they reversed course.

"They suddenly realized, 'Oh my God, this is not a great idea. This market is way too volatile," said Peter Tuchman of Quattro Industries, "so they rescinded the whole policy."

The slowing of the Chinese economy has sent shudders through markets throughout the world, and triggered fears of a global slowdown. The latest cause for worry was a weakening in China's currency to its lowest level since March 2011.

"China was the main driver of global growth for most of the last decade," said Tim Anderson of TJM Investments.

And with the Dow taking another hit, there are new fears of a bear market in the U.S. But analysts advised investors to hold firm.

"If you are a long-term investor, the best strategy is to stick to your game plan," said CBS News Business Analyst Jill Schlesinger. "That means don't do anything -- no panicking, no emotions jumping in."

And what about the U.S. economy? Friday's jobs report could bring positive news -- evidence that the economy is staying on track.

"A big down week for the first week of the year, by no means is a prediction that the year is going to be down -- in fact the opposite," Tuchman said, "but, you know, there's fear right now."

Also Thursday, the Standard & Poor's 500 index lost 47 points, or 2.4 percent, to 1,943. The Nasdaq fell 146 points, or 3 percent, to 4,689.

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