Dow Sinks 500, Worst Day Since Dec. 2008

Stocks plunged sharply Thursday, with the Dow down more than 500 points, in the biggest selloff since May 2010. All three major averages tumbled into negative territory for the year as investors were rattled over an intensifying global economic slowdown and ahead of the widely-followed monthly unemployment report.

Major U.S. Indexes
.DJIA 11383.98 -512.46 -4.31%

.NCOMP 2556.39 -136.68 -5.08%

.SPX 1200.12 -60.22 -4.78%


The Dow Jones Industrial Average plummeted more than 450 points, led by Alcoa [AA 12.965 -1.295 (-9.08%) ] and BofA [BAC 8.8178 -0.7222 (-7.57%) ]. The blue-chip index fell into "correction territory," defined by a drop of 10 percent from its peak from its intraday high in May. The last time the Dow dropped more than 400 points in a single session was in Dec. 2008.

The S&P 500 and Nasdaq also dipped into correction mode. And all three major indices are currently trading in negative territory for the year.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, surged more than 30 percent to trade near 32.

"We're not steering this bus—it's all coming from Europe," Art Cashin, director of floor operations at UBS Financial Services told CNBC. "We’re hearing reports of funds drawing out of European banks and we’re pretty close to something that might turn ugly."

"It may translate into a strain on the financials system and earnings on the multinationals, which have been carrying the load for Wall Street," Cashin added.

European shares hit a two-year low. The Bank of England and European Central Bank both left rates unchanged, but it did little to improve investor confidence. The ECB signaled it was buying government bonds in response to a deepening European debt crisis.

Investors were also spooked after ECB President Jean-Claude Trichet said "downside risks may have intensified."

"It is true that we are experiencing a high level of uncertainty, not just in the euro zone," he said.

On the economic front, weekly jobless claims were little changed last week, edging down to a seasonally adjusted 400,000, according to the Labor Department.

“The jobless claims number was not too encouraging … we need to see more of a significant improvement than the data just squeaking by,” said Doreen Mogavero, president and CEO of Mogavero Lee & Company.

The claims news comes ahead of Friday's government non-farm payroll data, which likely increased 85,000 last month, according to a Reuters survey, after rising only 18,000 in June. The unemployment rate is expected to hold steady at 9.2 percent.

“We’ve reduced our equity exposure by half at the end of the second quarter,” said Rob Stein, portfolio manager and senior economist of Astor Asset Management. “We’ll need to see the economic data stabilize.”

Adding to day's woes, JPMorgan [JPM 37.89 -2.01 (-5.04%) ] cut its third-quarter U.S. economic growth forecast by 1 percent, pointing to recent developments in the U.S. economy. The firm added that it doesn't expect the Fed to raise interest rates until at least 2013.

The dollar soared against a basket of currencies. The greenback's surge came amid a weakening economic outlook and moves by Japan to intervene in the forex market to bolster the yen.

http://www.cnbc.com/id/44017828

So European socialism is failing? Let's get the US to follow, that makes sense.

Per his wife, he's earned every one of those (failure and stress related) gray hairs.

How can we be sure that it's his birthday?

When the DJIA drops 500 points on your birthday, it's okay to take it as a karmic comment on your economic policies.

Sadly, the joke is on my 401K.

(08-04-2011 03:13 PM)DrTorch Wrote:  So European socialism is failing? Let's get the US to follow, that makes sense.

It's worse than that. European socialism isn't failing now, it failed 50 years ago. The successes they are having now are in places where they've moved away from socialism, and their failures are in the places where they haven't.

So we are chasing what Europe was 50 years ago, not what Europe is today. And they've already figured it out--that doesn't work.

Happy 57th Birthday!

(08-04-2011 07:31 PM)SouthGAEagle Wrote:  Happy 57th Birthday!

(08-04-2011 07:31 PM)SouthGAEagle Wrote:  Happy 57th Birthday!

That gets some rep. Don't expect the libs to get it. They're not exactly the sharpest knives in the drawer.

I hear Barry is planning a bus/campaign tour of "middle America" to celebrate his birthday .... Mexico, Costa Rica, Guatemala, etc... trying to expand his base.