Stocks drop for 2nd day; Europe up as VW shares halt slide

September 24 00:08 2015

U.S. stocks were looking to break back into the black and stay after a rough start that saw the Dow tumble about 100 points. The market has been relatively calm today as investors continue to digest recent turmoil, such as economic weakness in China, the Federal Reserve’s decision not to hike short-interest rates and the ongoing corporate fraud crisis surrounding Europe’s largest automaker.

The drop comes after European markets rebounded slightly as Volkswagen shares rose for the first time in three days after its emissions rigging scandal triggered a dramatic slide in previous sessions. The Dow Jones industrial average was down 25 points, or 0.62, at 2:15 p.m. ET. The Standard & Poor’s 500 index was virtually unchanged and the Nasdaq composite index was 0.2% higher.

European shares rose but were off their highs after news that Volkswagen CEO Martin WInterkorn was stepping down amid the emissions scandal was released. Germany’s DAX index gained  0.4%, France’s CAC 40 rose 0.1% and Britain’s FTSE 100 gained 1.6%. Shares of German automaker Volkswagen, which admitted it used software to cheat on emissions tests, rose about 3%  Wednesday, snapping a two-day losing streak. Shares of Asian automakers slid Wednesday, erasing gains from the previous session that appeared to stem from expectations Asian automakers would expand market share after the Volkswagen scandal.

Asian stock markets sank after a report showed weak Chinese factory data. The preliminary Caixin/Markit manufacturing index based on a survey of Chinese factory purchasing managers fell to 47.0 this month, the lowest level in six and a half years. Hong Kong’s Hang Seng index dropped 2.3% and the Shanghai composite index lost 2.2%. Japan’s stock market is closed for public holidays until Thursday.