More bad news on the economic front. The Dow is going south:
U.S. stocks plunged, with the Dow losing more than 350 points Thursday, as investors remain on edge about the global economy.
[UPDATE: It’s closing number was down 513:
The only good thing to say about today’s stock market is that it’s finally over. The Dow fell a staggering 513 points, or 4.3%, to close at 11,384. It’s the worst point drop since December 2008 and the worst percentage drop since February 2009, reports MarketWatch. The S&P 500 plunged 60, or nearly 5%, and NASDAQ dropped 137, about 5%. All three major indexes are now in the red for the year.]
There’s “total fear” in the market right now, said Bob Doll, chief equity strategist at BlackRock.
The Dow Jones industrial average (INDU) dropped 350 points, or 2.5%, with Alcoa (AA, Fortune 500), Caterpillar (CAT, Fortune 500) and Bank of America (BAC, Fortune 500) among the biggest drags on the blue chip index. The only gainer was Kraft (KFT, Fortune 500), following news that the company plans to split itself in two.
The S&P 500 (SPX) was down a staggering 41 points, or 3.2%, with only nine of the index’s components showing modest gains.
The Nasdaq (COMP) lost 91 points, or 3.4%. Some of the better performing tech stocks, Apple (AAPL, Fortune 500), Google (GOOG, Fortune 500) and Netflix (NFLX) were all down between 2% and 3%.
Stocks plunged, driving the Dow Jones Industrial Average down more than 300 points, as investors appeared to lose faith in the ability of the world’s policy makers to revive the global economy and stave off a rolling debt crisis in Europe.
The Dow slumped as much as 372.52 points, or 3.1%, to a low of 11523.92 in midday action, erasing all its gains for 2011. It recently was down 293, at 11611, a decline of 2.4%. The slump of the past few weeks has driven the Dow down almost 10% from its May intraday highs–a decline that would be classified as a correction.
The Standard & Poor’s 500-stock index fell 34 points, or 2.7%, to 1227 in recent action. The S&P recently was in correction territory on an intraday basis, having fallen more than 10% since May. The Nasdaq Composite slumped 74 points, or 2.8%, to 2618.
Investors across the globe have been buffeted by economic and political turmoil in recent days. In the U.S., fears have turned from worries about a possible default by the U.S. government to a weakening economic outlook. A string of data have pointed to a slowing of the recovery and investors are now bracing for the closely watched nonfarm payroll report on Friday. In Europe, leaders are struggling to contain a growing debt crisis. Investors are increasingly worried that troubles are spreading to Italy and Spain, driving down stocks across the region and sending borrowing costs of peripheral nations soaring.
In the U.S., all but one Dow stock was lower as investors sold across the board. All of the S&P 500 sectors were in the red and just 12 of the 500 stocks were up.
“This is a fear-driven market. We’re in a mini-free fall. It’s not a Black Monday, or Black Thursday, but it’s in pretty bad shape–all the big stocks are being liquidated,” said Christian Thwaites, president and chief executive at Sentinel Investments.
Gold and silver, which had been up on the day, reversed course as investors sold the metals to meet stock-based margin calls, traders said. If investors have purchased stocks with borrowed money, they often have to front more cash if the price of those shares fall, known as a margin call.
The drop in the U.S. came after a one-day respite Wednesday from nearly two weeks of declines.
Before trading opened on Wall Street, the Labor Department announced that the number of people applying for unemployment benefits last week fell slightly from the week before. But the report, following a raft of disappointing economic data in recent days, was taken by many gloomy investors to indicate only that the stalled job market is not improving.
Some investors also are selling to protect their portfolios before Friday’s monthly announcement of unemployment data.
“It’s almost a very simplistic thing here, there has just been indiscriminate selling,” said Michael Purves, the chief strategist at BCG Financial. “Markets work in strange and mysterious ways –- and sometimes it takes while for routs like this to get going.”
Investors have been moving into perceived safe havens such as gold, Treasury bonds and the Swiss and Japanese currencies. The value of the yen was down Thursday about 3% against the dollar after Japan’s central bank moved overnight to sell yen to protect the country’s export economy. Switzerland’s central bank took a similar step Wednesday to limit the value of the Swiss franc.
Joe Gandelman is a former fulltime journalist who freelanced in India, Spain, Bangladesh and Cypress writing for publications such as the Christian Science Monitor and Newsweek. He also did radio reports from Madrid for NPR’s All Things Considered. He has worked on two U.S. newspapers and quit the news biz in 1990 to go into entertainment. He also has written for The Week and several online publications, did a column for Cagle Cartoons Syndicate and has appeared on CNN.