China stocks volatile after dive the day before, other Asia markets waver between gains, falls

Shanghai stocks were volatile Tuesday after falling the most in eight years the day before while other Asian markets also flitted between gains and losses.

KEEPING SCORE: The Shanghai Composite Index wavered, falling 3.8 percent in early trading and then recovering. It was recently down 1 percent at 3,688.48. Hong Kong's Hang Seng was up 1.5 percent at 24,719.88. Tokyo's Nikkei 225 added 0.1 percent to 20,378.26 while Seoul's Kospi lost 0.1 percent to 2,036.91. Australia's S&P/ASX 200 was down 0.3 percent at 5,572.10. Taiwan's benchmark rose and markets in Southeast Asia fell.

CHINA'S PLUNGE: The Shanghai index fell the most since February 2007 on Monday, plunging 8.5 percent despite a massive government intervention. Analysts blamed investor concern over slowing economic growth and said a decline appeared inevitable after a rebound driven by government measures over the past two weeks. The Shanghai index had risen nearly 150 percent starting late last year before hitting a peak in early June and falling. Chinese authorities responded with a raft of market support measures that included prohibiting stock sales by major shareholders. State-owned brokerages and pension funds have pledged to buy shares.

ANALYST'S TAKE: "Clearly the Chinese markets are unable to support themselves. The mountain of leverage and the risks of margin calls are hitting market stability," said IG market strategist Evan Lucas in a report. A threat by Chinese authorities to prosecute short sellers "is a recipe for disaster," he said.

WALL STREET: U.S. stocks have declined over the past week after a number of big companies reported disappointing earnings. The Dow is down 2 percent for the year and the S&P by 0.5 percent. Investor concern about a possible slowdown in global economic growth also is increasing. On Monday, the Dow Jones industrial average lost 127.94 points, or 0.7 percent, to 17,440.59. The Standard & Poor's 500 lost 12.01 points, or 0.6 percent, to 2,067.64 and the Nasdaq composite lost 48.85 points, or 1 percent, to 5,039.78.

U.S. ECONOMY: Traders were turning attention to the U.S. Federal Reserve as they try to assess when interest rates will be raised. Expectations are split between September or December. Fed leaders meet this week but few expect a rate hike.

ENERGY: Benchmark U.S. crude declined 10 cents to $47.29 per barrel in electronic trading on the New York Mercantile Exchange. The contract shed 75 cents on Monday to $47.39. Brent crude, used to price international oils, fell 22 cents to $53.25 after tumbling $1.15 on Monday to $53.47.

CURRENCIES: The dollar rose to 123.51 yen from 123.27 yen on Monday. The euro fell to $1.1084 from $1.1087.