Wall Street plunges in worst selloff in two years
Investors fled Wall Street in the worst stock-market selloff since the depths of the Great Recession in early 2009 in what has turned into a full-fledged correction.
The Dow and the S&P tumbled more than 4 percent Thursday, and the Nasdaq lost 5 percent on fear the United States is staring at another recession and that Europe’s sovereign debt crisis is swallowing two of its largest economies.
Analysts predicted further losses even though stocks have fallen on nine of the last 10 days. Two-year Treasury yields fell to a record low as investors sought safety in short-term government bonds.
The S&P 500’s drop puts it more than 10 percent below its April 29 high, considered a correction. More than 13 billion shares changed hands, the busiest trading day in more than a year. Decliners beat advancers on the New York Stock Exchange by about 19 to 1.
The market’s recent malaise stems from a number of factors.
U.S. economic data has worsened, suggesting slowing growth from an already sluggish pace in the first half. Europe’s sovereign debt crisis has defied remedies and threatens to engulf large euro-zone economies Spain and Italy.
“The debt troubles in Europe, especially with the yields on Italian and Spanish government bonds soaring, are making investors gather as much liquidity as possible,’’ said Stephen Massocca, managing director of Wedbush Morgan in San Francisco.