Stock markets have terrible day; Dow drops 500 points


NEW YORK — Any way you cut it, it was a terrible day for the stock markets.

Worries about the state of the economy in the U.S. and around the world slammed stocks on Thursday, driving the Dow Jones industrial average to close down more than 500 points. It was the Dow’s worst drop since October 2008.

The Dow and the S&P 500 shed more than 4 percent; the Nasdaq more than 5 percent. All three major indexes are down more than 10 percent from their previous highs, putting them into correction territory. In addition, all three indexes have erased their gains for the year.

Story: World stock prices plunge amid ‘general fear’ of a new US recession, European debts The market’s so-called “fear index,” the CBOE Volatility Index (VIX), rose above 30 in its biggest daily percentage move since May 2010.

More than 13 billion shares changed hands, the busiest trading day in more than a year. Decliners beat advancers on the New York Stock Exchange by about 19 to 1.

In terms of lost treasure, the day’s drop slashed (on paper) about $800 billion, as measured by the Wilshire 5000 Total Market Index. The Wilshire has lost about $1.9 trillion in the last nine days.

The Dow Jones industrial average was down 512.46 points, or 4.31 percent, at 11,383.98. The Standard & Poor’s 500 Index fell 60.21 points, or 4.78 percent, at 1,200.13. The Nasdaq Composite Index lost 136.68 points, or 5.08 percent, at 2,556.39.

Story: Time to say it: We’re probably in a double dip recession “People are throwing in the towel because they can’t find relief on any front. There are a lot of worries about the economy,” said Milton Ezrati, market strategist at Lord Abbett Co. in Jersey City, New Jersey, which manages $110 billion in assets.

Analysts predicted further losses even though stocks have fallen on nine of the last 10 days. Two-year Treasury yields fell to a record low as investors sought safety in short-term government bonds.

Story: Investors flee stocks for safer ground Investors are now nervously focused on the crucial monthly jobs data to be released Friday by the Labor Department. Expectations are not high.

Earlier, the Labor Department reported that weekly initial jobless claims totaled 400,000, less than the 405,000 that was forecast. Investors were disappointed they didn’t see more improvement in the labor market gauge.

Story: Jobless claims slip slightly but remain elevated The market’s recent malaise stems from a number of factors. U.S. economic data has worsened, suggesting slowing growth from already sluggish pace in the first half. Europe’s sovereign debt crisis has defied remedies and threatens to engulf large euro-zone economies Spain and Italy.

“The debt troubles in Europe, especially with the yields on Italian and Spanish government bonds soaring, are making investors gather as much liquidity as possible,” said Stephen Massocca, managing director of Wedbush Morgan in San Francisco.

European Commission President Jose Manuel Barroso urged eurozone leaders to make further changes to their bailout fund — including boosting its size — to ensure it can effectively stem the debt crisis that has rocked the currency union for 21 months.

Officials moved to calm markets and ease volatility around the world, with the largest move coming from Tokyo, where the government spent an estimated 1 trillion yen ($13 billion) to stem the strength of its currency.

“They’re trying to fight a futile battle,” said Ankita Dudani, currency strategist at RBS. “It won’t have a lasting impact so long as the euro-zone crisis continues and the global (economic) outlook deteriorates.”

Story: Why companies aren’t hiring more workers Spain’s benchmark stock market index plunged 3.9 percent Thursday, marking its biggest one-day loss this year yet, and Italy’s stock market also plummeted, with Milan’s FTSE MIB index down by 5.16 percent.

Germany’s DAX index of blue chip companies fell by 3.4 percent, and France’s CAC 40 lost 3.9 percent.

Reuters and The Asssociated Press contributed to this report.
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About Nick S

Im just a normal guy.. A Father/Husband and Avid Blogger... Also interested in the Paranormal... More Info about me coming soon...
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