While you were sleeping: China weighs on Wall Street

Wall Street was mixed, recovering from steeper losses earlier in the session, as investors reassessed the impact of China's currency devaluation on Tuesday.

In late trading in New York, the Dow Jones Industrial Average declined 0.2%, the Standard & Poor's 500 Index fell 0.1%. The Nasdaq Composite Index eked out a 0.1% gain.

In the Dow, slides in the shares of JPMorgan Chase and Boeing, last down 2% and 1.6% respectively, outweighed gains in the shares of Intel and Apple, last 1.6% and 1.4% stronger respectively.

Apple shares last traded at $US115.13, after sliding as low as $US109.63 earlier in the day, while Intel shares traded at $US29.45, recovering from a session low of $US28.66.

China's concern about the slowdown in the pace of the nation's economic growth was highlighted by Tuesday's surprise yuan move, sparking bets the US Federal Reserve might delay an interest rate hike. Some were not so sure.

"It could have positive implications for the market because the Fed may be inclined to postpone raising rates, but I'm not sure how surprised they are by it," Pennsylvania-based Advisors Asset Management fund manager Gene Peroni told Bloomberg. "Weakness in the Chinese economy didn't come about over the weekend."

New York Fed President William Dudley says China's currency depreciation might "not be inappropriate."

"Obviously if the Chinese economy is weaker than maybe what the Chinese authorities anticipated, it's probably not inappropriate for the currency to adjust in consequence to that weakness," Mr Dudley says.

"It's very early days to judge what's happening in China in terms of the changes in their currency policy. Clearly what was happening is the Chinese yuan was appreciating along with the US dollar," he says.

Ford Motor remained "very bullish" on China.

"Longer term, we're still very bullish on China," head of global purchasing Hau Thai-Tang told an auto industry conference in New York. If there is a "prolonged period of recession" in China, Ford would balance supply with demand, he says. "we don't see anything like that at this point."

Shares of Alibaba sank in New York, last 4.9% lower, after China's largest e-commerce company reported its most tepid quarterly revenue growth in three years.

Shares of Macy's dropped, last 5.1% lower, after the company downgraded its full-year sales outlook. It also says it has formed a joint venture in China, which will begin by selling products on Alibaba's Tmall Global marketplace late this year.

In Europe, the Stoxx 600 Index ended the day with a 2.7% drop from the previous close. The UK's FTSE 100 Index slid 1.4%, Germany's DAX Index shed 3.3%, while France's CAC 40 Index dropped 3.4%.

Aside from concern about European companies exporting to China weighing on the market, disappointing company earnings, including those of Henkel and Delta Lloyd, also hurt sentiment.

(BusinessDesk)