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Financial instability in China took investors on a rocky ride Monday on Wall Street, and wiped out more than $6.5 billion of the value of Detroit’s Big Three automakers in a single day.

The Dow Jones industrial average briefly plunged more than 1,000 points Monday, partly due to a global wave of selling triggered by the slowdown in China. The Dow eventually finished down 588.4 points — the eighth-worst single-day point decline and the second straight fall of more than 500 — a loss of 3.6 percent. The Standard & Poor’s 500 index slid 77.7 points, or 3.9 percent; it’s now in “correction” territory, Wall Street jargon for a drop of at least 10 percent from a recent peak. The last market correction was nearly four years ago.

And while many stocks recovered as the day wore on, automotive stocks didn’t recover as much as the overall market. And those losses came after a week of falling prices.

Shares of General Motors Co. have dropped 12.1 percent in the past week, Fiat Chrysler Automobiles NV has fallen 11.1 percent and Ford Motor Co. has fallen 10.1 percent. While that’s worse than the markets as a whole, those broader markets aren’t looking so healthy, either: The Dow is down 9.5 percent in a week, and the S&P 500 is down 9.9 percent.

Ford and GM both fell Monday to their lowest closing prices since April 2013. Trading of Ford stock stopped automatically early in the day because of volatility. It eventually closed down 4.8 percent to $13.19.

GM briefly fell more than $5 per share but recovered to $27.80 — down 6 percent in twice-normal trading volumes. GM is now down about 18 percent from its November 2010 initial public offering, when it closed its first day of trading at $34.19.

Fiat Chrysler on Monday declined 5.6 percent to $13.75, following a low of $12.56 per share.

Other automakers were hit hard: Tesla Motors Inc. fell 5.2 percent, while Toyota Motor Corp.’s American Depository Receipts were down 4.7 percent on the New York Stock Exchange, and Honda Motor Co.’s were down 4 percent.

Concerns for GM investors

But GM has been hit hardest.

“GM is heavily exposed to the rising risk to volume, competition and currency in China,” Morgan Stanley analyst Adam Jonas said in a research note. “While the market may have got the message short-term, we believe the long-term risks to GM investors may be underestimated, overshadowing very strong performance in North America.”

The automaker’s Chinese investments accounted for more than 32 percent of GM’s net income over the last two years, and about half of its automotive cash flow. Morgan Stanley now assumes GM sales in China over 10 years will fall by 5.6 percent.

A big loser is the United Auto Workers retiree medical benefits trust, which holds 140.15 million shares in GM, or an 8.7 percent stake. That stake — which will go to pay benefits to thousands of retirees — fell on paper by $252.3 million to $3.9 billion.

The big losses will impact tens of thousands of auto employees and retirees who hold company stock through 401(k) retirement plans. Ford employees and retirees held about 221 million shares of stock through defined contribution plans as of Dec. 31, according to the company proxy. Those shares have fallen on paper by about $400 million over the last five days.

In addition, a depressed stock market can cause some buyers — especially of luxury cars — to put off a major purchase.

Losses hit executive suites

For some executives, Monday meant a big loss on paper. GM President Dan Ammann saw the value of his stake fall by $296,000 on Monday, while GM CEO Mary Barra’s stake fell by $121,000. Warren Buffett’s Berkshire Hathaway investment conglomerate lost $74 million on its 41 million-share investment, a 2.55 percent stake in the automaker.

GM has repurchased $2.1 billion in stock through July 21. GM has said it plans to buy back $5 billion in stock by the end of 2016. A lower stock price means GM can buy back more shares for the same amount of money.

Ford CEO Mark Fields lost $635,000 on paper, while the Ford Family trust lost $5 million on its special class of voting rights company stock. The big losses also mean many executives’ stock options won’t be worth anything until the automaker’s stock prices recover dramatically. Fields, for example, was awarded 710,000 stock options in June 2014 — but they aren’t worth anything unless the stock price rises above $17.21.

Unrest felt globally

China’s impact on the U.S. is a firm reminder of the new global economy for Wall Street and China’s importance to the automotive industry. China is the world’s largest auto market. Heightened concern about a slowdown in China had already shaken markets around the world on Friday, driving the U.S. stock market sharply lower. The trend continued Monday as China’s main stock index sank 8.5 percent. And in early trading Tuesday, Shanghai and Shenzhen benchmarks were 6 percent lower in early trading.

Worries about a China-fueled global economic slump sent other overseas markets lower on Monday, as well.

In Europe, Germany’s DAX fell 4.7 percent, while the CAC-40 in France slid 5.4 percent. The FTSE 100 index of leading British shares dropped 4.7 percent.

In Asia, Japan’s Nikkei fell 4.6 percent, its worst one-day drop since in more than 21/2 years. Hong Kong’s Hang Seng index fell 5.2 percent, Australia’s S&P ASX/200 slid 4.1 percent and South Korea’s Kospi lost 2.5 percent.

Associated Press contributed.

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