How market declines could affect your wallet

HERE’S HOW LOCAL STOCKS FARED

Here’s where share prices ended up for locally-traded stocks after Monday’s closing bell, when compared to the previous closing stock price.

AK Steel Holding Corp., West Chester Twp.: -2.17% to $2.70

AtriCure Inc., West Chester Twp.: -4.67% to $24.47

Cincinnati Financial Corp., Fairfield: -4.73% to $51.31

Cintas Corp., Mason: -3.82% to $81.63

First Financial Bancorp, Cincinnati: -4.10% to $17.99

Fifth Third Bancorp, Cincinnati: -5.63% to $18.69

Cedar Fair Entertainment Co., Sandusky: -less than 1 percent to $51.68

General Electric Co., Connecticut (major regional operations): -2.93% to $23.87

The Kroger Co., Cincinnati: -3.32% to $33.77

LCNB Corp., Lebanon: -1.99% to $15.80

The Procter & Gamble Co., Cincinnati: -3.76% to $69.14

Park National Corp., Newark: -3.72% to $80.40

Rex American Resources Corp., Dayton: -3.79% to $44.21

Teradata Corp., Miami Twp.: -3.94% to 28.99

Source: Yahoo! Finance

A slowing global economy has now pushed all three closely watched U.S.-based stock indexes to lose more than 10 percent of their value from previous trading highs set in May, according to an investment expert.

Before U.S. stock markets opened for trading Monday, investors were watching how a more than 8 percent drop overnight in the Chinese market would affect prices.

After plunging more than 1,000 points to start the day, the Dow Jones Industrial Average rebounded to close down 586 points, or 3.4 percent, at 15,871 points. The S&P 500 was down 73 points, or 3.7 percent, at 1,897. The Nasdaq composite had shed 162 points, or 3.5 percent, at 4,543 points, according to the Associated Press.

This news outlet interviewed money manager Jim Russell of Cincinnati investment advisory firm Bahl & Gaynor to learn more about how market declines could affect your wallet.

“When the markets go down — and go down suddenly and violently — it’s not a confidence builder,” Russell said. However, “We don’t think we’re close to recession here in the United States this year or next year. Unemployment is low. Inflation is low. Interest rates are low. Those are three things really positive for the consumer.”

Q: What happened when the U.S. stock market opened Monday?

A: "What we're seeing today is really a continuation of what we saw mainly Thursday and Friday of last week. The global markets really started to trade down in earnest…

… It’s the most the markets have been off since September 2011.

We’re off again today. We do think it’s somewhat likely that stocks will continue to trade down a bit over the next couple trading sessions.”

Q: What are the biggest factors impacting the market, causing the plunge?

A: "This is not new news, but it's very clear China's growth rate is slowing down. This is not welcome news because China is the second largest economy in the world, so it's meaningfully big.

China has been really responsible for pulling the United States and Europe along for exporting goods… Those days appear to be over.

We got a very credible signal that China’s slowdown is growing perhaps even faster than most people thought about two weeks ago when they devalued their currency.

They have been desperately since November of last year cutting interest rates and using central market measures to prop up their economy.

… What we’re seeing is their markets coming back to reality. Not only is their economy slowing faster than they thought, but their markets were overvalued wildly.”

Q: How does the plunge affect the broader economy and my pocketbook?

A: "It is not a positive for consumer confidence. A lot of big ticket items like appliances, certainly homes, certainly cars… those decisions sometimes get put on hold.

… The economy sometimes gets a little bit of a pause around market volatility periods.

With China slowing down, that means Europe slows down because they export a lot things (such as) cars to China. And if Europe slows down, that means the United States slows down.

We sell things to China and if China’s slowing down, that matters here.”

Q: Can China send the world into a global recession?

A: "That's probably at the root of what people really want to know.

We think the China slowdown might tend to slowdown other large chunks of the global economy.

… Can China cause a global recession? That’s a stretch we think. But it can cause a little bit of a global slowdown.

This isn’t new. China has been slowing down for a year or so. Some of the concerns most recently is China’s officials don’t have a good solution to stem the slowdown.

We don’t see a recession in the United States this year or next year. Consumers are loaded with cash … It probably does push off the Fed decision to lower interest rates.”

Q: Maybe this is more of a correction?

A: "We think this is probably in that boat. We think the economic fundamentals are sufficiently strong and that stock market prices aren't so expensive for something so harsh.

We think this will be confined to a few percentage points because of those other factors.

We do think the stocks can come down a little bit more maybe.

There’s no question this is going to be a negative day, it’s just a question of how much.”

The Associated Press contributed to this report