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MarketWatch: Chinese Stocks Hammered

Specialists on the floor of the New York Stock Exchange Monday. AP Photo/Richard Drew

A lackluster day in Wall Street was followed by a dreadful one in Asia.

The slowing economic recovery continues to spook investors, sparking a flight to so-called safe havens, like U.S. Treasuries and gold. Yesterday, the yield on the 10-year Treasury note fell to 3.032%, the lowest level since late-April 2009, keeping mortgage rates at 40-year lows.

Chinese stocks dropped to a 14-month low — the Shanghai Composite index tumbled 4.3%, and is now down approximately 26% for the year.

Japanese stocks fell to a 4-month low. European stocks fell over 2% on renewed fears of Euro zone debt, and U.S. stock futures are pointing to a lower opening this morning.

On today's economic calendar, the Case-Shiller Home Price Index is expected to show little progress on the real estate front, while consumer confidence is expected to rise.

Yesterday, the Commerce Department said personal income grew faster than spending last month. Personal income increased 0.4% in May from April, while spending rose 0.2%. The personal saving rate — the amount of after-tax income that isn't spent — rose to 4% in May from 3.8% the month prior. The savings rate is now at its highest level since September.

While that's good news for households, it's not so good for the economy, which relies on consumer spending to propel it forward.