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(MSNBC)-NEW YORK - Stocks tumbled Tuesday, with the broader market sinking to its biggest one-day drop in more than 3-1/2 years, as Wall Street joined a global market plunge sparked by growing concerns that the U.S. and Chinese economies are cooling and that equities prices have become overinflated.
The Dow Jones industrial average finished the day down 415 points, or 3.3 percent, recovering slightly from a sudden plunge of over 500 points in mid-afternoon trading. The broader Standard & Poor’s 500-stock index fell 50 points, or 3.4 percent — its biggest one-day slide in more than 3-1/2 years, while the Nasdaq composite index dropped 97 points, or 3.9 percent.
“As the afternoon has progressed, there seems to be a sense of panic among some professional investors,” said Andre Bakhos, president of Princeton Financial Group in Princeton, N.J. “There seems to be just an air of nothing is safe anymore, there’s nowhere to go and people are rotating into bonds as a safe haven.”
Tuesday’s sell-off wiped out the Dow’s and the S&P 500’s gains for the year. The Nasdaq, too, was in the red on a year-to-date basis earlier in the session, but it moved back up into the plus column before the close. The White House said Tuesday it was monitoring movements in the financial markets.
Investors’ confidence has been knocked down by a slew of data showing that the economy may be decelerating more than anticipated. A Commerce Department report that orders for durable goods in January dropped by the largest amount in three months exacerbated jitters about the direction of the U.S. economy, which were raised a day earlier when former Federal Reserve Chairman Alan Greenspan said the economy may be headed for a recession.