Investors dumped stocks yesterday in Wall Street’s worst session in three months on the fear that even with a bailout for Greece, Europe’s debt crisis could spread to other weak euro zone countries.
The selloff echoed a wave of fear that gripped financial markets as investors fretted the crisis in Europe could derail the global economic recovery. A gauge of investor fear jumped more than 18 percent.
Big exporters to Europe including technology and industrial companies tumbled, with Hewlett-Packard off 3.9 percent to $50.64 and Caterpillar Inc. down 4.6 percent to $66.70.
“It looks like we've got some profit-taking on early-cycle exporters, companies with a big global presence over in Europe,” said Fred Dickson, chief market strategist at D.A. Davidson & Co in Lake Oswego, Ore.
Basic materials shares tumbled as the euro hit a one-year low against the U.S. dollar. The Reuters-Jefferies commodity index and the S&P materials index both posted their worst day since early February, sliding 2.3 percent and 3.5 percent, respectively.