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Investing

US Stocks Brace for Brutal Sell-Off at Open

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By Douglas A. McIntyre Published

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The forces that crushed the Shanghai Composite by 8% and then major European indexes by 3% appear ready to spread to U.S. markets. A brutal open may be a sell-off of as much as 2.5%, based on Dow Jones Industrial Average and Nasdaq futures.

The question is whether the United States will hold the line with a recovery in stocks by noon, or whether the collapse will worsen.

On one side of the debate are the strength of the U.S. economy and the benefit of low oil prices. On the other are the effects of a weak economy in China and the fact that U.S. markets trade at high price-to-earnings (P/E) ratios. Certainly, the tech sector suffers from the P/E issues, as has been proven by the depth of the drop in these stocks last week.

While there is no evidence that this drop is anything like the one in 1987, it will be if shares collapse throughout the trading day.

ALSO READ: 5 Defensive High-Yield Stocks to Survive the Sell-Off Carnage

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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