A tidal wave of worry about housing and credit markets swept over Wall Street Thursday, sending the Dow industrials tumbling 311 points in its second-biggest point loss of the year. The 30-share Dow Jones industrial average was down as much as 449 points earlier in the session before moving off its lows and closing down about 2.3 percent. The Dow sank 416 points on Feb. 27 on worries about slowing global growth.
The broader S&P 500 (down 38.45 to 1,479.64, Charts) tumbled 2.3 percent while the tech-laden Nasdaq (down 64.86 to 2,583.31, Charts) fell 1.8 percent.
Treasury bonds surged as investors sought safety, taking the yield on the 10-year note to 4.77 percent from 4.91 percent late Wednesday. Bond prices and yields move in opposite directions.
Oil jumped briefly above $77 a barrel but then turned lower along with stocks as traders worried that slower economic growth would dent demand for oil. Light crude for September delivery slid 86 cents to $75.02 a barrel on the New York Mercantile Exchange. Elsewhere, the dollar fell against the euro and the yen, and gold fell sharply.
Trading curbs, used to slow down the market in the event of a big move, were imposed by the New York Stock Exchange late this morning.
Credit market fears, which prompted a selloff that dragged the Dow down 226 points Tuesday, again unnerved investors and put pressure on stocks.
More disappointing news from the housing sector also weighed on investors. Homebuilders including D.R. Horton (down $0.75 to $16.73 and Pulte Homes (down $1.20 to $19.55), the nation's No. 2 and No. 3 builders, posted huge losses. And a bigger-than expected drop in new home sales in June added to those woes. The Commerce Department reported new home sales tumbled 6.6 percent.
The two big selloffs this week come just a week after the Dow hit another record, closing above 14,000 for the first time.
Overall, the earnings news investors considered Thursday was mixed. Dow component Exxon Mobil (down $4.97 to $87.82), the nation's largest oil company, posted a decline in quarterly profits, sending its shares 5.5 percent lower.
But embattled automaker Ford Motor (up $0.14 to $8.11) surprised investors reporting an unexpected quarterly profit early Thursday, helped by reduced losses in its North American operations. Ford stock climbed nearly 2 percent in late afternoon trade.
Apple (up $5.52 to $142.78) shares jumped over 5 percent after the company reported results that beat Wall Street's estimates after the market closed Wednesday.
Dow component 3M Co., (down $0.47 to $89.15) known for producing Scotch tape, reported earnings that topped Wall Street estimates. The stock edged higher.
Among individual issues, 29 of the 30 Dow components were lower in afternoon trade.
In other economic news, orders for big-ticket items meant to last three years or more rose less than expected in June.
Jobless claims fell unexpectedly last week, the government reported.
Market breadth was negative on significantly heavier than normal volume. Losers topped winners by more than 10 to 1 on the New York Stock Exchange on volume of 2.41 billion shares. Decliners beat advancers more than 6 to 1 on the Nasdaq on volume of 3.08 billion shares.
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