A trader works on the floor of the New York Stock Exchange in New York, the United States, Aug. 4, 2011. The sell-off in the Wall Street accelerated on Thursday, with the blue-chip Dow plunging more than 500 points, as investors rushed out of equities and other riskier assets on fears of an economic slowdown and European debt contagion. [Xinhua]
Triggered by fear of another round of economic recession, the Wall Street saw an accelerated sell-off on Thursday, with the Dow Jones industrial average dropping more than 500 points, the worst performance since the 2008 gobal financial crisis.
The fear trade brought the Dow and broader stock indices down more than 10 percent from their high levels in the spring of this year and put them into the correction territory.
Thursday's plunge was the ninth-steepest decline by points for the Dow. Basic materials and energy sectors led the slide, down about 6 percent after crude prices tumbled more than 5 percent and settled at the lowest level since February 18.
Previously, investors had been focusing on Washington's deadlocked negotiation on government debt ceiling. Once the ceiling was raised, they shifted their focus back to the economic foundamentals, and the selling accelerated.
The worst day for stocks since January 2009 came also partly because contagious concerns on the European debt problems reemerged in the market.
On Thursday, after leaving the interest rate unchanged at 1.5 percent, the European Central Bank said it resumed buying government bonds after a four-month break in response to the deepening sovereign debt crisis.
Thursday's data came in better than expected, but still pictured a tepid economy.
The Labor Department said on Thursday that weekly applications for unemployment benefits edged down 1,000 to a seasonally adjusted 400,000, the lowest in four months.
The report showed the jobs market may slowly recovered, but the initial claims have been hovered at or above 400,000 since March. Meanwhile, recent data such as manufacturing, consumer spending and hiring by private companies were all below the levels considered indicative of a healthy, growing economy.
The Dow Jones industrial average closed down 512.76 points, or 4.31 percent, at 11,383.68 on Thursday. The S&P 500 fell 60.27 points, or 4.78 percent, to 1,200.07. The Nasdaq Composite Index plunged 136.68 points, or 5.08 percent, to 2,556.39.
