Thursday, August 4, 2011

Dow Jones plunges 300 points as worldwide sell off begins

Tumbling energy and materials stocks launched the markets to session lows, with the Dow sinking more than 200 points and the broad S&P 500 shedding 2.2%, as traders grappled with economic fears and a soaring greenback.

Today's Markets

As of 11:38 a.m. ET, the Dow Jones Industrial Average fell 276 points, or 2.3%, to 11,619, the S&P 500 slipped 33.2 points, or 2.7%, to 1,226 and the Nasdaq Composite slid 76.4 points, or 2.8%, to 2,617. The FOX 50 tumbled 19.1 points, or 2.1%, to 882.

Uneasiness on Wall Street was high on Thursday. Gold, often seen as a safe-haven in tumultuous times has leaped to record higher two session in a row. The precious metal recently rose $14.70, or 0.9%, to $1,682. The VIX, sometimes referred to as a gauge of fear, surged 12% in morning trade.

With the debt ceiling raised, focus on Wall Street has shifted to the beleaguered labor market.

The number of individuals applying for first-time unemployment benefits fell to 400,000 from a revised 401,000 in the prior week, slightly better than the 405,000 economists were expecting. However, claims have remained right around the 400,000-level for weeks, leading economists to question the robustness of the recovery in the labor markets.

"The pace of firings are moderating but are still too elevated at this point of the economic cycle," wrote Peter Boockvar, managing director at Miller Tabak + Co., in a research note.

Other analysts see more improvement in the labor market: "This report and recent trends in claims data suggest that the softness in the labor market may be beginning to subside," analysts at Barclays Capital noted. (more)