Stocks dive on Japan fears; S&P 500 and Nasdaq now in the red for 2011
U.S. stocks suffered another bruising sell-off in heavy trading Wednesday as fears mounted of a larger disaster at Japan’s Fukushima nuclear reactor complex.
Broad market indexes now are negative year-to-date after surrendering the last of their gains.
The Dow Jones industrial average slumped 242.12 points, or 2%, to 11,613.30, its lowest closing level since Dec. 31.
That left the Dow up 0.3% for the year. But most other major indexes have fallen into the red for 2011, after rallying strongly in January and early February on rising optimism about the U.S. economy.
The Nasdaq composite index is down 1.4% this year after diving 50.51 points, or 1.9%, to 2,616.82.
Investors dumped stocks early in the day after European Energy Commissioner Guenther Oettinger was quoted as saying that the situation at Japan’s crippled Fukushima complex was “out of control.”
Oettinger later backtracked on those comments, but that was too late to reverse the mini-panic he sparked in markets.
Although it is unclear how grave a threat the damaged reactors pose as workers fight to contain damage, the Times reported that “the situation appeared to be deteriorating. One sign was that the government increased the maximum radiation dose that workers could be exposed to from 100 millisieverts to 250 millisieverts, describing the move as ‘unavoidable due to the circumstances.’ ”
Analysts said financial markets were hostage to the news coming from Fukushima. "We're moving on the headlines here," said Phil Orlando, equity market strategist at Federated Investors in New York.
Although stocks had rallied in Asia overnight, bouncing back from Tuesday’s losses, sellers swarmed in Europe and North America as worries about the nuclear crisis escalated again.
Major European stock markets fell between 2% and 2.5% for the day.
Another depressant on stocks: Oil prices rose after Bahrainian police and soldiers stormed a traffic circle occupied by pro-democracy protesters, reminding investors that tensions in the Middle East remain elevated, even as Japan's crisis continues to dominate the headlines.
U.S. crude futures edged up 80 cents to $97.98 a barrel. Crude in London was up $2.37 to $111 a barrel.
-- Tom Petruno
Photo: The damaged No. 4 nuclear reactor at Fukushima. Credit: Tokyo Electric Power Co. via the Associated Press