Stocks remain down after gloomy economic reports
The Dow Jones industrial average was recently down 460.65 points, or 4.1%, to 10949.56 after falling more than 500 points in early trading. 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 2.07% 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.
Leading indexes ended the day down 4.5% in England and 5.8% in Germany.
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 Thursday 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 and Nathaniel Popper
Photo: Brendan McDermid / Reuters