US open: Dow drops triple digit on the back of China's selloff

US stocks took a sharp downward turn early on Monday, on the back of a global selloff triggered by a sharp decline in Chinese stocks.

Just before 1500 BST, the Dow Jones Industrial Average was down 143 points to 17,425.36, while the S&P 500 and the Nasdaq were 22 and 58 points lower respectively.

China drives selloff

Asian stocks fell following negative data from China with a resumption of selling in commodities weighing heavily on investor sentiment.

The Shanghai composite index plunged 8.47%, its worst performance in three weeks. The drop was due to the release of data which showed industrial profits fell 0.3% in June and a decline in commodity prices.

“Global investors are heavily exposed to China as a source of global economic growth,” said CMC Markets’ analyst Jasper Lawler.

“The stock market crash in China is spreading to other markets because the risk is Chinese state control will eventually send the economy to the same fortune.

Monday data

Orders for US durable goods rose by 3.4% month-on-month, ahead of expectations calling for a 2.6% increase,according to figures released by the Commerce Department.

"The growth in manufacturers’ inventories of durable goods was notably stronger than expected in June and represents the fastest pace of inventory stocking for the sector since December of last year," Barclays' analysts said in a note.

"This boosted our estimate of private inventory investment in the second quarter, more than offsetting the decline in estimate equipment investment.

"On net, our second quarter GDP tracking estimate rose two-tenths, to 3.4%."

However, the reading represented a 2.0% drop year-on-year.

Later in the session, at 1930 BST, the Dallas Fed manufacturing activity for July is on tap.

Teva surges on acquisition

In company news, UBS fell 0.63% after an erroneous media report saw the Swiss bank was release quarterly results earlier than expected.

However, the lender reported better-than-expected second quarter net profit.

Shares in Mylan NV plunged 14%, after Teva Pharmaceuticals Industries announced it had withdrawn its offer for the drug maker after agreeing to acquire Allergan PLC’s generic drug-making business for $40.5bn.

Teva and Allergan jumped 11.3% and 5.66% respectively.

Elsewhere, the dollar fell 0.18% against the pound, losing 0.60% against the yen and 1.14% against the euro, while gold futures reversed some of last week’s losses and climbed 0.76% to $1,093.80.

Oil prices fell, with West Texas Intermediate losing 1.2% to $47.57 a barrel, while Brent shed 1.66% to $53.73 a barrel.