Dow closes down 353 points - WFLA News Channel 8

Dow closes down 353 points

Posted: Updated:
NEW YORK, NY -

There was no let-up in the flight from stocks and bonds Thursday as the Dow Jones industrial average plunged 353 points and wiped out almost two months of gains.

It's being called Wall Street's worst day of 2013.

A day after the Federal Reserve roiled U.S financial markets when it said it could step back from its aggressive economic stimulus program later this year, financial markets continued to slide. A slowdown in Chinese manufacturing added to Wall Street's worries.

The breadth of the sell-off was seen across global financial markets, from sharply lower stock markets in Asia to falling government bond prices in Europe and the U.S. Gold also plunged.

The Dow's drop - which knocked the average down 2.3 percent to 14,758.32 - was its biggest since November 2011. It comes just three weeks after the blue-chip index reached an all-time high of 15,409.

The Standard & Poor's 500 lost 40.74 points, or 2.5 percent, to 1,588.19. It also reached a record high last month, peaking at 1,669.

Small-company stocks fell more than the rest of the market, a sign that investors are aggressively reducing risk.

In U.S. government debt, the yield on the benchmark 10-year note rose to its highest level since August 2011.

A Fed policy statement and comments from Chairman Ben Bernanke started the selling in stocks and bonds Wednesday. Bernanke said the Fed expects to scale back its massive bond-buying program later this year and end it entirely by mid-2014 if the economy continues to improve.

The bank has been buying $85 billion a month in Treasury and mortgage bonds, a program that has kept borrowing costs near historic lows for consumers and business. It has also helped boost the stock market.

Alec Young, a global equity strategist at S&P Capital IQ, said investors weren't expecting Bernanke to say the program could end so quickly, and are adjusting their portfolios in anticipation of higher U.S. interest rates.

"What we're seeing is a pretty significant sea-change in investor strategy," Young said.

As financial markets dropped, investors likely put the proceeds of their sales in cash as they waited for the dust to settle, said Quincy Krosby, a market strategist at Prudential Financial.

Investors "are raising cash right now, for fear the deterioration will continue," said Krosby.

The yield on the 10-year Treasury note rose to 2.41 percent, from 2.35 percent Wednesday. It's up sharply since May 3, when it hit a year low of 1.63 percent.

Government bonds are used as benchmarks for mortgage rates. The sharp increase in yields prompted investors to sell the stocks of homebuilders, whose business could be hurt if the pace of home buying slows down. Even an encouraging report on home sales Thursday failed to arrest the slide.

PulteGroup plunged $1.89, or 9.1 percent, to $18.87. D.R. Horton fell $2.13, also 9.1 percent, to $21.31.

Markets were also unnerved after manufacturing in China slowed at a faster pace this month as demand weakened. That added to concerns about growth in the world's second-largest economy. A monthly purchasing managers index from HSBC fell to a nine-month low of 48.3 in June. Numbers below 50 indicate a contraction.

Earlier in other global markets, Japan's Nikkei index lost 1.7 percent. The FTSE 100 index of leading British shares fell 3 percent while Germany's DAX dropped 3.3 percent.

In currency trading, the dollar rose against the euro and the Japanese yen.

In commodities trading, gold plunged to its lowest point since September 2010, falling $87.80, or 6.4 percent, to $1,286.20 an ounce.

Traders sold the precious metal as its appeal as insurance against inflation and a weak dollar faded. Both became less of an issue after the Fed said it was contemplating an end to its bond-buying program.

The rising dollar pushed oil prices lower. A stronger dollar makes oil more expensive for holders of other currencies. The price of crude oil fell $2.84, or 2.9 percent, to finish at $95.40 a barrel in New York, its biggest drop since November

Some investors said the sell-off in stocks may be overdone. The Fed is considering easing back on its stimulus because the economy is improving. The central bank has upgraded its outlook for unemployment and economic growth.

The S&P 500 is still up 11.3 percent, for the year, not far from its full-year increase of 13.4 percent last year.

"People are overreacting a little bit," said Gene Goldman, head of research at Cetera Financial Group. "It goes back to the fundamentals, the economy is improving."

In other trading, the Nasdaq composite fell 78.57 points, or 2.3 percent, to 3,364.63.

Among other stocks making big moves:

- GameStop, a video game store chain that sells new and used games, rose $2.41, or 6.3 percent, to $40.94 after Microsoft backpedaled and said that there will be no limitations on sharing games on its upcoming Xbox One gaming console.

- Rite Aid fell 23 cents, or 7.4 percent, to $2.88 after the nation's third-largest drugstore chain lowered its forecast for 2014 earnings.

  • 8 On Your SideMore>>

  • 15 year old sexually molested in Highlands Regional Medical Center ICU

    15 year old sexually molested in Highlands Regional Medical Center ICU

    Thursday, April 24 2014 7:19 PM EDT2014-04-24 23:19:41 GMT
    People go to hospitals to be healed, not sexually molested. But an 8 On Your Side investigation confirmed a 15 year old Highlands county girl, who was heavily medicated and sedated at Highlands Regional Medical Center, was sexually molested in her ICU bed.
    People go to hospitals to be healed, not sexually molested. But an 8 On Your Side investigation confirmed a 15 year old Highlands county girl, who was heavily medicated and sedated at Highlands Regional Medical Center, was sexually molested in her ICU bed.
  • Squatters moving out of New Port Richey soldier's home

    Squatters moving out of New Port Richey soldier's home

    Thursday, April 24 2014 6:50 AM EDT2014-04-24 10:50:51 GMT
    Squatters begin moving out of Spc. Michael Sharkey's home on Wednesday night.Squatters begin moving out of Spc. Michael Sharkey's home on Wednesday night.
    Our 8 On Your Side story about a New Port Richey soldier who says his home has been taken over by squatters is striking a nerve in the community and now, the squatters are moving out. 
    Our 8 On Your Side story about a New Port Richey soldier who says his home has been taken over by squatters is striking a nerve in the community and now, the squatters are moving out.  
  • Pricey processing issue at Tampa hair academy resolved

    Pricey processing issue at Tampa hair academy resolved

    Wednesday, April 23 2014 9:35 AM EDT2014-04-23 13:35:13 GMT
    Loretta Maloy says she always expected to pay for the courses she took those several weeks, but thought $10,000 in loans just wasn’t right.
    Loretta Maloy says she always expected to pay for the courses she took those several weeks, but thought $10,000 in loans just wasn’t right.
  • NewsMore>>

  • Lakeland woman says cats missing, found cut in half

    Lakeland woman says cats missing, found cut in half

    Thursday, April 24 2014 8:00 PM EDT2014-04-25 00:00:17 GMT
    A Lakeland woman is trying to figure out what's happening to several cats that have gone missing in the neighborhood and two that have been discovered cut in half.
    A Lakeland woman is trying to figure out what's happening to several cats that have gone missing in the neighborhood and two that have been discovered cut in half.
  • Florida governor's race latest ad hurls campaign insults

    Florida governor's race latest ad hurls campaign insults

    Thursday, April 24 2014 7:37 PM EDT2014-04-24 23:37:20 GMT
    The name-calling in the governor’s race is ratcheting up. Gov. Rick Scott’s campaign is out with a new ad that calls former Gov. Charlie Crist a “slick politician” and a “lousy governor.
    The name-calling in the governor’s race is ratcheting up. Gov. Rick Scott’s campaign is out with a new ad that calls former Gov. Charlie Crist a “slick politician” and a “lousy governor.
  • Ukraine moves against insurgents in the east

    Ukraine moves against insurgents in the east

    Thursday, April 24 2014 7:35 PM EDT2014-04-24 23:35:12 GMT
    Ukrainian Interior Minister Arsen Avakov says police have cleared the city hall in a southeastern city of pro-Russian protesters who had been occupying it for over a week.
    Russia announced new military exercises Thursday involving ground and air forces near its border with Ukraine, swiftly responding to a Ukrainian operation to drive pro-Russia insurgents out of occupied buildings in the...
  • Most Popular StoriesMost Popular StoriesMore>>

  • Squatters moving out of New Port Richey soldier's home

    Squatters moving out of New Port Richey soldier's home

    Thursday, April 24 2014 6:50 AM EDT2014-04-24 10:50:51 GMT
    Squatters begin moving out of Spc. Michael Sharkey's home on Wednesday night.Squatters begin moving out of Spc. Michael Sharkey's home on Wednesday night.
    Our 8 On Your Side story about a New Port Richey soldier who says his home has been taken over by squatters is striking a nerve in the community and now, the squatters are moving out. 
    Our 8 On Your Side story about a New Port Richey soldier who says his home has been taken over by squatters is striking a nerve in the community and now, the squatters are moving out.  
  • Squatters left dogs at soldier's house in New Port Richey

    Squatters left dogs at soldier's house in New Port Richey

    Thursday, April 24 2014 7:04 PM EDT2014-04-24 23:04:53 GMT
    One of the dogs left at the soldier's houseOne of the dogs left at the soldier's house
    The house of Army Spc. Michael Sharkey sat almost empty early Thursday morning after two squatters said they moved out the day before.
    The house of Army Spc. Michael Sharkey sat almost empty early Thursday morning after two squatters said they moved out the day before.
  • Mom bites off dog's ear to save daughter during attack

    Mom bites off dog's ear to save daughter during attack

    Tuesday, April 22 2014 2:49 PM EDT2014-04-22 18:49:19 GMT
    Image from CNN/KHOU-TVImage from CNN/KHOU-TV
    In a backyard in Alvin, swings a very lucky girl. Her name is Mackenzi Plass, or Kenzi for short, and she survived a dog attack and has undergone several surgeries."She'll be two and a half in May," said her very proud mother Chelsi Camp. "She's doing great. You wouldn't know it if you couldn't see."Mackenzi has scars on her face after the ordeal just weeks ago that put her mother's animal instincts to the test."You do whatever you can," said Camp. "I don't have physical strength at my side."...
    In a backyard in Alvin, swings a very lucky girl. Her name is Mackenzi Plass, or Kenzi for short, and she survived a dog attack and has undergone several surgeries."She'll be two and a half in May," said her very proud mother Chelsi Camp. "She's doing great. You wouldn't know it if you couldn't see."Mackenzi has scars on her face after the ordeal just weeks ago that put her mother's animal instincts to the test."You do whatever you can," said Camp. "I don't have physical strength at my side."...
Powered by WorldNow

200 South Parker Street, Tampa, FL 33606

Telephone: 813.228.8888
Fax: 813.225.2770
Email: news@wfla.com

Can’t find something?
Powered by WorldNow
All content © Copyright 2000 - 2014 Media General Communications Holdings, LLC. A Media General Company.