The U.S. stocks plunged on Thursday, with the blue-chip Dow plummeting nearly 400 points, as the Federal Reserve's bleak outlook on the economy and poor economic data added to fears of a double-dip recession.
The Dow Jones industrial average tumbled 391.01, or 3.51 percent, to 10,733.83. The Standard & Poor's 500 plunged 37.20 points, or 3.19 percent, to 1,129.56. The Nasdaq Composite Index plummeted 82.52 points, or 3.25 percent, to 2,455.67.
The sell-off stated after the U.S. Federal Reserve announced Wednesday that it will replace 400 billion short-term government bonds with long-term debt, in an effort to lower interest rates and stimulate the economy. However, the move by the central bank failed to lift the markets as the Fed gave a gloomy view about the economic outlook in its statement.
In its highly-anticipated statement, the Fed said a complete economic recovery was still years away, adding that the United States economy has "significant downside risks to the economic outlook, including strains in global financial markets."
Outside the United States, the risk of a Greek debt default is rising. Germany's and France's Purchasing Manager Indexes (PMI) in Sept. dipped to their lowest levels since 2009. And the HSBC China Flash PMI showed China's factory sector contracted for a third consecutive month in September. All these added to fears to equities and major indexes were now on track for their worst week in almost three years.
