Stocks sink on first day of 2016 on China, Mideast worries

NEW YORK -- The new year got off to an inauspicious start on Wall Street as stocks tumbled Monday in a global sell-off triggered by new fears of a slowdown in China and rising tensions in the Middle East.

Less than an hour before the closing bell, the Dow Jones industrial average was down more than 2 percent, its biggest drop since September, after sharper declines in Asia and Europe.

The steep drops on the first trading day of 2016 served as a reminder the worries that weighed on financial markets in 2015 -- the fragile global economy and unpredictable oil prices -- are not going away anytime soon.

"It's going to be a turbulent year," said Kevin Kelly, chief investment officer of Recon Capital Partners. "This isn't a blip."

The trouble started in China, where weak manufacturing figures in the world's second-largest economy sent the Shanghai Composite Index plunging 6.9 percent before Chinese authorities halted trading.

Investors were also unnerved by heightened tensions between Saudi Arabia, a huge oil supplier, and Iran. Saudi Arabia executed a prominent Shiite cleric, prompting Iranian protesters to set fire to the Saudi Embassy in Tehran on Sunday. The price of oil gyrated wildly.

In the U.S., the Dow was down 418 points, or 2.4 percent, to 17,008 with less than an hour of trading left. It was down as much as 468 points earlier in the day.

The Standard & Poor's 500 index was down 48 points, or 2.4 percent, to 1,995. The Nasdaq composite gave up 145 points, or 2.9 percent, to 4,862.