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News Wrap: China’s great economic fall burns investors

In our news wrap Tuesday, market panic continued for a third day in China, despite an effort by the Central Bank to boost the economy by cutting interest rates. Also, the head of the IAEA promised that its checks of Iran's nuclear activities will be "the most robust" anywhere.

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  • JUDY WOODRUFF:

    U.S. financial markets battled all day to recoup its losses from yesterday, then collapsed under the pressure. At one point, the Dow Jones industrials were up more than 440 points, helped by an interest rate cut in China. But the gains evaporated in the final minutes of trading, making it the sixth losing day in a row. In the end, the Dow dumped another 200 points to close below 15670. The Nasdaq fell nearly 20 points, and the S&P 500 slid 25.

  • GWEN IFILL:

    There was no letup in the stock sell-off in Shanghai, amid gathering gloom over China's economy.

    Jonathan Miller of Independent Television News reports from Hong Kong.

  • JONATHAN MILLER:

    Red numbers are bad, the market down nearly 8 percent again today, calamitous for small individual investors, of which there are tens of millions, like 73-year-old Mr. Gao.

    "The situation in China is much worse than anywhere else," he says. "It just keeps falling. Ordinary people cannot afford this."

    Many ordinary people have had their life savings wiped out. Today, the Chinese government pulled another lever in an effort to end this financial carnage, cutting interest rates in a bid to boost the economy and encourage investment.

    Mr. Wong is a Hong Kong fund manager who is scathing of how Chinese communist leaders have handled this crisis.

  • ALEX WONG, Fund Manager:

    The real problem is that they get in too early. They should just let it fall a lot more first and then make your intervention more effective.

  • JONATHAN MILLER:

    But they have lost about $140 billion already.

  • ALEX WONG:

    Yes, but if you compare with the level last year, actually, we are still much higher than last year's level.

  • JONATHAN MILLER:

    Viewed like that, the great fall of China more of an adjustment really. Listed companies optimistically were overvalued. The market had shot up 150 percent in 12 months.

    China's credit squeeze, one of the symptoms of downturn that alerted inverts all wasn't well. Then, further rattled by new data confirming this, the sell-off ensued. With 40 mainland countries listed on the Shenzhen, Hong Kong investors were very exposed.

    Many investors here, both institutional and individual, have been badly burned. Until this past week, there were basically two kinds of investors in Hong Kong, those who believed in China as an indestructible economic powerhouse and engine of global growth and those who didn't. Now most don't.

    Astrologers have warned that the Year of the Goat held risks for financial affairs. For goat people, the lucky direction is north, but, right now, it's still all heading south.

  • GWEN IFILL:

    The sell-off in China has put even more pressure on oil prices, now at their lowest since the recession began. But in New York today, oil managed a small comeback, closing back above $39 a barrel. We will explore the oil production boom and price bust after the news summary.

  • JUDY WOODRUFF:

    Meanwhile, the Congressional Budget Office has scaled back its economic outlook for the United States. Its projection released today calls for growth of 2.3 percent for this year. In January, the CBO had forecast growth to run 2.8 percent for the year. The CBO also lowered its federal budget deficit forecast to $426 billion. That is the smallest since 2007.

  • GWEN IFILL:

    The head of the International Atomic Energy Agency promised today that its checks of Iran's nuclear activities will be the most robust anywhere. The U.N. agency is supposed to verify Iranian compliance with a nuclear deal.

    IAEA chief Yukiya Amano spoke in Vienna today, and said Iran turned over substantive information on its program this month. It's unclear if any of the new information is new.

  • JUDY WOODRUFF:

    More than 180,000 people are homeless in Bangladesh after floods, landslides and a cyclone inundated the country. The Red Cross and Red Crescent made an appeal today for nearly $1 million to give people temporary shelter. The region was hit hard by Cyclone Komen at the end of July, that on top of flooding that began back in June.

  • GWEN IFILL:

    More than 46 million people worldwide now suffer from dementia. What's more, the group Alzheimer's Disease International estimates that number will double every 20 years. A new report out today says more than half of dementia victims now live in developing countries, and the numbers are growing fastest in East Asia and Africa.

  • JUDY WOODRUFF:

    And that symbol of reliability, London's Big Ben, is finally showing its age. Officials say the famed clock tower at the British Parliament has been running about six seconds fast. So, mechanics had to fine-tune it by placing pennies on the pendulum. A clocksmith for Parliament says it's to be expected. After all, he says, it's like running a car for 24 hours a day 365 days a year for the last 156 years.

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