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U.S. stocks open lower after global selloff

Xinhua, January 4, 2016 Adjust font size:

U.S. stocks opened sharply lower on Monday, the first trading day of 2016, amid global markets rout and geopolitical tensions between Iran and Saudi Arabia.

Shortly after the opening bell, the Dow Jones Industrial Average plunged 345.60 points, or 1.98 percent, to 17,079.43. The S&P 500 tanked 37.70 points, or 1.84 percent, to 2,006.24. The Nasdaq Composite Index plummeted 112.81 points, or 2.25 percent, to 4,894.60.

China's shares tumbled 7 percent on Monday, triggering the new "circuit breaker" mechanism, as the Caixin General China Manufacturing Purchasing Managers' Index (PMI) is the 10th month in a row below the 50-point level which demarcates contraction and expansion.

Tokyo stocks also plunged on the first trading day of the year as below par manufacturing data from China compounded a dour market mood, with sentiment initially dashed by Wall Street's slump at the end of last year.

U.S. stocks continued to fall after volatile session on Thursday, the last trading day of 2015, as investors digested the worst-than-expected initial jobless claims.

Saudi Arabia cut off diplomatic ties with Iran over the weekend and asked all Iranian diplomats to leave the country within 48 hours.

Analysts said the heightened geopolitical tensions in the Middle East sent traders scurrying from stocks into safe haven assets. Endi