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Stock markets fall again in early trading

August 4, 2011 |  8:15 am

Stock markets plunged this morning, with the Dow down about 250 points, as increasing pessimism Foggy wall -- justin lane epa about the economy overtook investors around the globe.    

The Dow Jones industrial average was recently at 11,642 points, down 254 points, or 2.1%.  Broader indexes were down more sharply, with the technology-heavy Nasdaq composite index off 2.8%.

The Standard & Poor's 500 index briefly entered correction territory, down 10% from its recent highs.

Most stock markets in Europe were down at least 2% as the trading day there drew to a close, with prices declining steadily over the course of the day. Investors there are worried about the increasing debt problems in Italy and Spain.

The drop in the U.S. came after a one-day respite Wednesday from nearly two weeks of declines.

Before trading opened on Wall Street, the Labor Department announced that the number of people applying for unemployment benefits last week fell slightly from the week before. But the report, following a raft of disappointing economic data in recent days, was taken by many gloomy investors to indicate only that the stalled job market is not improving.

Some investors also are selling to protect their portfolios before Friday's monthly announcement of unemployment data.

Investors have been moving into perceived safe havens such as gold, Treasury bonds and the Swiss and Japanese currencies. The value of the yen was down Thursday about 3% against the dollar after Japan's central bank moved overnight to sell yen to protect the country's export economy. Switzerland's central bank took a similar step Wednesday to limit the value of the Swiss franc.

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-- Nathaniel Popper

Photo: EPA/Justin Lane.

 

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