Stocks sink worldwide, sending Dow down 470 points
The Dow Jones industrial average tumbled more than 470 points, and other indexes followed suit.
At 7:45 a.m. PDT, the Dow was down about 474 points, or 4.2%, to 10,932. The broader Standard & Poor’s 500 was off 4.4%.
Investors scrambled into Treasury bonds, with the yield on the 10-year Treasury note threatening to fall below the formerly unimaginable level of 2%. The yield dropped to 2.02% from 2.16% on Monday.
The U.S. market opened lower after European stocks suffered a rout overnight, skidding as much as 6% on concerns that the continent’s banks could have trouble financing their operations, a potential replay of the credit crunch that struck American institutions in the 2008 financial crisis.
Stocks in the U.S. had stabilized in the past week, after plunging sharply early this month following the downgrade of Treasury debt by Standard & Poor’s Corp.
In addition to the European sell-off, U.S. traders were hit by a variety of bad economic news as they arrived at their desks this morning.
First-time jobless claims rose a more-than-expected 408,000 last week. Consumer prices jumped 0.5% in June from May, more than double the 0.2% increase economists had estimated. Core inflation, which excludes volatile food and energy prices, rose 0.2%.
Traders also were spooked by Morgan Stanley's lowering of its forecast for global growth.
-- Walter Hamilton
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