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Wall Street plunges on global growth concerns Stocks fall on fears of Europe’s prolonged slump
(about 1 hour later)
The U.S. stock market plunged on Thursday amid fears of a slumping European economy, erasing gains from Wednesday’s heated rally and sending the Dow Jones Industrial Average on its biggest one-day freefall of the year. The U.S. stock market plunged Thursday on fears of a slumping European economy, erasing gains from Wednesday’s heated rally and sending the Dow Jones industrial average on its biggest one-day drop of the year.
Major stock indexes fell about 2 percent, with the Dow dropping 334 points to 16,659, Nasdaq dropping 90 points to 4,378, and the Standard & Poor’s 500 index sliding 40 points to 1,928. Major stock indicators fell about 2 percent, with the Dow dipping 334 points, to 16,659.25; the Nasdaq falling 90 points, to 4378.34; and the Standard & Poor’s 500-stock index sliding 40 points, to 1928.21.
The roller-coaster day of trading came after Wednesday’s remarkable surge, inspired by news from the Federal Reserve suggesting the central bank would keep interest rates low. The Dow that day logged its biggest gain of the year, and the S&P 500 marked its biggest turnaround in nearly three years. The roller-coaster day of trading came after Wednesday’s remarkable surge, inspired by news from the Federal Reserve suggesting that the central bank would keep interest rates low. The Dow logged its biggest gain of the year that day, and the S&P 500 had its biggest turnaround in nearly three years.
By the end of trading Thursday, those gains had been more than reversed, with the S&P 500 plummeting to its lowest point in two months. The last time the Dow saw three straight days of a 200-point change was in August 2011, when the federal government lost its AAA credit rating. By the end of trading Thursday, those gains had been more than reversed, with the S&P 500 dropping to its lowest point in two months. The last time the Dow moved more than 200 points for three straight days was in August 2011, when the federal government lost its AAA credit rating.
European Central Bank President Mario Draghi, speaking in Washington on Thursday, cautioned that inflation was “excessively low” and the euro zone’s recovery appeared to be losing steam. A slow European economy and low inflation could lead the dollar to further appreciate, discouraging U.S. exports. European Central Bank President Mario Draghi, speaking in Washington on Thursday, cautioned that the region’s inflation was “excessively low” and that its recovery appeared to be slowing. A slow European economy and low inflation could lead the dollar to further appreciate, discouraging U.S. exports.
That appeared to compound worries of a slowing global economy with disappointing forecasts contributing to the market’s growing streak of volatility. Investors turned instead to safe havens, with yields on 10-year Treasury notes falling to 2.3 percent, the lowest in about 15 months. That, compounded with investors’ worries about the slowing global economy and disappointing forecasts, contributed to the stock market’s growing streak of volatility Thursday. Investors turned instead to safe havens, with yields on 10-year Treasury notes falling to 2.3 percent, the lowest in about 15 months.
Energy stocks were particularly crushed by anxiety over a slump in global growth. Oil continued to fall, with a barrel of light sweet crude dropping below $86, its lowest point since 2012. Shares of both Exxon Mobil and Chevron dropped nearly 3 percent. Energy stocks were particularly hit, and the price of oil continued to fall, with a barrel of light sweet crude dropping below $86, its lowest point since 2012. Shares of Exxon Mobil and Chevron dropped nearly 3 percent.
There was some good news. The number of Americans applying for new unemployment benefits stayed below 300,000 for the fourth week in a row, the first time since 2006, new federal data showed. There was some good news. The number of Americans applying for new unemployment benefits stayed below 300,000 for the fourth week in a row, the first time since 2006, federal data showed.
Apple shares were boosted after billionaire investor Carl Icahn declared its stock undervalued and counseled chief executive Tim Cook to buy back company shares. The tech giant’s shares flirted with a record, coming within nearly 1 point of an all-time high, before settling with a 22 cent gain at 101.02. Apple shares rose after billionaire investor Carl Icahn declared the stock undervalued and counseled chief executive Tim Cook to buy back company shares. The company’s stock flirted with a record, coming within nearly 1 point of an all-time high before settling with a 22-cent gain at $101.02.
drew.harwell@washpost.com