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Dow Jones Industrial Average falls by nearly 400 points

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
Traders look up at price monitor as they work on the main trading floor of the New York Stock Exchange shortly before the opening bell of the trading session in the Manhattan borough of New York City, January 7, 2016. (Reuters photo)

Stocks in the United States and Europe have fallen sharply as worries intensify about China’s economy and dropping oil prices.

In what could be its worst start to a new year in a century, the Dow Jones Industrial Average on Thursday sunk by 392 points, or 2.3 percent, putting US stocks down by 5 percent. At one time, the Dow Jones slumped by 442.88 points.

The NASDAQ Composite Index closed down at 4,689.43, losing more than 3 percent, on Thursday.

The broader Standard & Poor’s 500 index lost 45.09 points, or 2.27 percent, to 1,945.17.

Shares of Apple, JPMorgan Chase, GE, and Chevron dropped by more than 3 percent.

Meanwhile, the US dollar lost 1 percent of its value against a basket of currencies .It tumbled 1.5 percent to $1.0937 against the euro and 0.8 percent to the Japanese yen at 117.48.

A trader leaves the New York Stock Exchange after the closing bell on January 7, 2016. (AFP photo)

European shares also fell on Thursday. The pan-European FTSE 100 Index and Eurozone’s blue-chip Euro STOXX 50 index were both down 2.3 percent and 1.7 percent, respectively.

The market chaos comes after China allowed the biggest currency devaluation in five months, and Shanghai stocks were halted for the second time this week.

The People's Bank of China (PBOC) set the yuan midpoint rate lower for an eighth consecutive day on Thursday. The 0.5 percent decline was the biggest between daily fixings since August.

"People see the weakness in China and in the overall equity market and think there's going to be an impact on corporations here in the United States," said Robert Pavlik, chief market strategist at Boston Private Wealth in New York.

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