Wall Street was off more than 1 percent on Thursday, pushing the S&P 500 and the Dow Jones industrial average down 10 percent for the year, as investors jettisoned stocks and scurried toward safer shores.
All 10 S&P major sectors were in the red, led by financials, especially banks. The financial sector, already the worst performing S&P sector this year, dropped 2.71 percent.
Federal Reserve Chair Janet Yellen stuck to her guns on her return to Capitol Hill on Thursday, saying a weakened global economy and steep slide in U.S. equity markets is tightening financial conditions faster than the Fed wants.
Yellen said that the Fed is looking at negative interest rates in light of the monetary policy of some European countries. The Bank of Japan moved to negative rates late last month and Sweden on Thursday cut its main interest rate deeper into negative territory.
"At this point, it feels like the markets really do not like negative deposit rates," said Josh Navarro, global investment specialist at J.P. Morgan Private Bank in New York.
"We're in a new normal where volatility is back," Navarro said, adding that the market was also being driven by technical factors.
At 11:00 a.m. ET (1600 GMT), the Dow Jones industrial average was down 300.3 points, or 1.89 percent, at 15,614.44.
The S&P 500 was down 29.18 points, or 1.58 percent, at 1,822.68 and the Nasdaq Composite index was down 50.14 points, or 1.17 percent, at 4,233.45.
Globally, stocks fell sharply. The dollar hit a 16-month low against the yen and investors bought gold and top-rated bonds. U.S. Treasury security yields plunged to levels not seen since 2012 in some cases.
U.S. bank stocks, like their European peers, took a severe beating. The S&P 500 bank index was down 3.8 percent, led by Bank of America's 6.3 percent fall.
Boeing tumbled 10.5 percent to $104.09 after a Bloomberg report said the U.S. SEC was probing the planemaker over costs and expected sale of two jetliners.
The stock was the biggest drag on the Dow, responsible for 68 points of the index's 310 point decline.
At the other end of the Dow was Cisco, up 8.4 percent at $24.41 after reporting a bigger-than-expected profit. The stock was the only gainer on the Dow and give the biggest boost to the S&P 500 and the Nasdaq.
Declining issues outnumbered advancing ones on the NYSE by 2,576 to 425. On the Nasdaq, 2,069 issues fell and 525 advanced.
(Reporting by Abhiram Nandakumar in Bengaluru; Editing by Savio D'Souza)
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Published Date: Feb 11, 2016 11:15 pm | Updated Date: Feb 11, 2016 11:15 pm