August 24, 2015 Last Updated 3:36 pm

Update: Saved by an email? Dow recovers from 1,000 point drop at open, but ends day down 3.5%

Apple CEO Tim Cooks emails CNBC to give host an update on the company’s continue strong sales in China, in an unusual bit of market support from the Cupertino company

The Dow Jones Industrial Average fell 1,000 points at the opening of trading this morning, reacting to trading in China that saw the Shanghai exchange lose more than 8 percent in value today. European markets then followed suit, with the German DAX closing today down 4.70 percent, the FTSE 100 in the UK down 4.67 percent, and the French CAC 40 down 5.35 percent.

stock marketsIt looked like a route. But then, early this morning, Apple’s CEO Tim Cook emailed CNBC’s Jim Cramer and did something most unusual: he gave the business network an update on its business in China, after Cramer wondered aloud about the impact on Apple of China’s slowing economy.

“As you know we don’t give mid-quarter updates and we rarely comment on moves in Apple stock,” Cook wrote. “But I know your question is in the minds of many investors.”

“I get updates on our performance in China every day, including this morning, and I can tell you that we have continued to experience strong growth in China through July and August. Growth in iPhone activations has actually accelerated over the past few weeks, and we have had our best performance of the year for the App Store in China during the last two week.”

Apple, of course, is deeply dependent on growth in China to fuel its continued revenue increases. Quoting my own report from earlier this morning: “Apple last quarter recorded 112 percent growth in revenue from the Chinese market accounting for the lion’s share of the company’s 33 percent revenue growth in the quarter. Without growth in China, Apple revenue would have grown only 13 percent (though that would still have been a fairly solid number).”


The Guardian live blogs coverage of its falling UK stock market

Whether investors were paying attention to the email and were suddenly cheered up, or whether buyers simply swooped in to look for bargains, is something we probably will never know. But the US stock markets almost immediately began to trim their losses. In fact, at lunchtime, the Dow was down less than 150 points (and Apple stock had gone into the black, trading up a few points, before fading into the red as the market sank in the afternoon). (The NYT quoted one stock trader as saying “People just realized, ‘This is a little stupid, and there are some great opportunities.’”)

Unfortunately, after lunch reality started to set in. The US markets would not go their own way, and instead began to sell off as the afternoon wore on. This post will be updated reflect the final numbers, but with one hour of trading to go the Dow was down over 600 points, nearing a 4 percent decline – somewhat less than Europe’s sell-off, but in the neighborhood.

What does this all mean, especially for the media business? That depends a lot on what happens next. In 1987, the markets crashed on Monday, falling far more than they have today. Over 22 percent, in fact. But by the time the Presidential election of 1988 occurred all that was forgotten and Bush Sr. won an easy victory. The economy did OK until the recession that occurred following the first Gulf War. That timing ended up badly for Bush and Clinton (the first) won a fairly easy victory (that was also the year Ross Perot grabbed 19 percent of the vote).

The stock collapse of 2008 occurred along side the banking crisis and no doubt influenced the 2008 election. But unlike this year’s two day crash, the decline in the stock market occurred over a long period of time. Stocks peaked in October of 2007 above 14,000, then sank steadily. By March 2009, the Dow Jones average had reached a low of around 6,600. It is probably good to remember that from that point stocks have risen in value until they hit 18,282 in May of this year.

Note: This post has been updated several times during the afternoon, and will continue to be until the final bell.

Last update: at the closing the bell, the Dow stood at 15,871.28, a drop of –588.47, or –3.58 percent. The Nasdaq closed at 4,526.25, down –179.79, or –3.82 percent. The drop in the Dow was the biggest one day sell-off since 2011. That wouldn’t that big a deal, I suppose, had Friday’s sell-off not occurred. But it did, so the two day fall certainly will hurt people’s retirement accounts.