Stocks drop in early trading

Wall Street was lower Monday morning as strong gains in Shanghai and the start of a busy week for corporate earnings failed to calm nerves about rising rates and the prospect of slowing economic growth around the world.

At the US open, the Dow Jones industrial average fell more than 100 points, or 0.44%. The S&P 500 was down 0.24% while Nasdaq composite was little changed.

“Transitions occurring in interest rates and in the way trade is conducted globally are causing investor sentiment to become unsettled,” John Stoltzfus of Oppenheimer Equity Research said in an email.

That followed a sharp recovery in Chinese stocks, with the Shanghai Composite gaining nearly 5% as Beijing jumped in to prop up equities. After reporting last week that the economy expanded at the slowest pace in a decade in the third quarter, Chinese stocks had seen their steepest drop in three years.

Earnings season has also helped a rebound on Wall Street, which had led a global sell-off earlier this month as investors fretted about rising rates. Dozens of major companies – including Microsoft, Amazon and Google parent company Alphabet – post third-quarter earnings this week. About 160 S&P 500 companies will also report, according to Reuters.

European stocks were also modestly higher after the ratings agency Moody’s left Italy in investment grade territory in a report, easing some concerns about the populist government’s plans to sharply increase public spending. But it also cut Rome’s credit rating in the report to one level above junk. On Monday, Italy continued to clash with European Union officials who have called Rome’s budget “unprecedented.”

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