New York (AFP)

The New York Stock Exchange fell sharply on Monday, posting one of its worst sessions of the year, shaken by concerns about the real estate sector in China and the fate of giant Evergrande.

According to final results, the Dow Jones index dropped 1.78% to 33,970.47 points.

The technology-intensive Nasdaq lost 2.19% to 14.713.90 points.

The S&P 500 fell 1.70% to 4,357.73 points.

"Risk aversion has intensified (...) while contagion concerns have arisen over the potential bankruptcy of the Chinese group Evergrande, the most indebted real estate developer in the world," Schwab analysts summarized.

The Chinese real estate giant is finding it increasingly difficult to cope with its over $ 300 billion debt it owes interest on this week and investors fear bankruptcy that could spill over across the globe.

Asked about these concerns, the White House delayed: "this is a Chinese company whose activities are primarily concentrated in China," said spokeswoman Jen Psaki.

"Having said that, we are still monitoring global markets, including assessing any risk to the US economy and we are ready to respond appropriately if necessary."

For Karl Haeling of LBBW, "the risk of contagion only exists if the Chinese authorities allow Evergrande to go completely bankrupt, but that does not make sense for China given the internal problems and the job cuts it will create" .

Beyond fears of a domino effect, other factors have made investors nervous in a market that has already been treading water for several sessions, said Gregori Volokhine of Meeschaert Financial Services.

"I am not sure that China, a communist, interventionist country, lets Evergrande explode. For me, the headwinds for the markets come clearly from Washington", underlined the analyst, citing in particular the impasse on the raising of the ceiling of the American debt "has become a political issue".

- Play with fire -

"We are really playing with fire at the risk that the government will close, which is not catastrophic but that does not give confidence in the short term", noted Mr. Volokhine also stressing that the adoption of the infrastructure plan of 1,200 billion dollars stalled.

Markets were also tight with the Fed's monetary meeting starting on Tuesday and waiting for clues about the timing of a reduction in monetary support.

Yields on 10-year bonds in the bond market fell to 1.30% from 1.36% at the previous close as investors sought safe assets.

Sign of the concern of operators, the market volatility index, the VIX, also known as the "fear index" jumped to around 25 points, its highest level since May.

All eleven sectors of the S&P concluded strongly in the red.

Financials took the hit, falling 2.22% in the wake of lower bond yields.

Citi, Bank of America, Goldman Sachs all dropped more than 3%.

The energy sector ended at half mast, yielding 3.04%, in the wake of lower oil prices.

The stock of the construction equipment firm Caterpillar, heavyweight of the Dow Jones, fell 4.47% to 190.82 dollars while the copper specialist and mining giant Freeport-McMoRan fell 5.69% to 31 , $ 17.

This accumulation of downward trends also sparked profit-taking.

The title Alphabet, parent company of Google, which has gained more than 60% since the beginning of the year, dropped 1.73% to 2,780.34 dollars.

Rare titles to have a smile, those of the airlines have hailed the fact that the Biden administration will reopen the borders to vaccinated European travelers.

American Airlines gained 3.04% to $ 20.33.

The American video game publisher Activision Blizzard fell 4.25% to 76.18 dollars while it would be the subject, according to the Wall Street Journal, of an investigation by the constable of the Stock Exchange, the SEC, in particular on accusations of harassment within the company.

© 2021 AFP