Dow slides 300 points, fear index touches year's high

10:30 pm IST: The Dow continues to trade in a narrow range over the three hours at 11,145, down300 points, while S&P is down 45 points at 1,155 and Nasdaq is down by 100 points at 2,432. Bank of America remains the weakest frontline stock, post AIG’s legal claim on the company. Bank of America is trading 16 percent lower, while other banking stocks like Citigroup is down 10 percent and JP Morgan is down by over 6 percent. Gold has touched a new high of $1,714 per ounce and crude oil was trading 4 percent lower at $83.33. US market’s fear index or VIX, its measure of volatility has touched a new 52 week high of 40.45. A VIX reading of above 30 is a sign that investors are getting worried. The figure of 40.45 by VIX is still lower than 90 it touched in October 2008, post Lehman scam.

10:00 pm IST: The Dow is still nursing a loss of 325 points and trading at 11,119. The S&P 500 is 43 points off at 1,155. Nasdaq is 100 points down at 2431. Nymex crude is still around $83 a barrel. The dollar index, which measures the value of the dollar against a basket of six major trading currencies, is holding steady at 74. Bank of America shares continue to freefall, plunge 15 percent. Citigroup shares tumble by 9 percent. Gold, meanwhile, continues its spectacular run - hits its all-time high of $1,713 an ounce again.

8:55 pm IST: The Dow is trading 280 points lower at 11,164. S&P 500 is down 31 points at 1,167. Nasdaq dives 80 points to 2,452. Among stocks, Bank of America’s shares continue to be battered: its shares have plunged 10 percent, while Citigroup’s and Ford Motor’s shares have slumped by 7 percent and 6 percent, respectively.

8:15 pm IST: The Dow sinks 310 points to 11,134 after S&P downgrades mortgage finance agencies Freddie Mac and Fannie Mae. The S&P 500 tumbles 42 points to 1,157. The Nasdaq also loses 82 points, trades around 2,447. European markets get no relief as selling pressure continues: the CAC, FTSE and Dax are down 3-4 percent. Gold jumps to $1,704 per ounce, gaining 3 percent.

7:45 pm IST: European markets continue to trade in the red: France’s CAC, the UK’s FTSE and Germany’s Dax have sunk 2-3 percent. The Dow is down 300 points at 11,145. The S&P 500 has also lost 2.5 percent, and the tech-heavy Nasdaq has slipped 3 percent. In stocks, Bank of America has plunged 8 percent, while Citigroup has nosedived 5 percent. Ford Motors is down 5 percent.

7:15 pm IST: Dow Jones Industrial Average (DJIA) tumbles 225 points on opening, is currently trading at 11,295. S&P 500 is down 19 points at 1,179. Nasdaq slumps 50 points to 2,482. Ten-year government bond yields are largely unchanged at 2.47 percent. Gold is around $1,700 per troy once, while oil is almost 4 percent lower at $83 per barrel.

Given the panicky market reactions from Asia to Europe on Monday, owing to the US rating downgrade by Standard & Poor’s last Friday, the US markets today are expected to open in the red. The silver lining may be that US markets are said to have already factored the impact of the downgrade as it was expected.

Even though European markets opened stronger rising by almost 1 percent as investors cheered ECB’s move to buy sovereign bonds, which resulted in yields on Spanish and Italian debt to fall sharply lower. However, these gains were soon washed out as worries over growth and the impact of the US downgrade weighed heavily on the market.

In Asia, Japan’s Nikkei closed 2.18 percent down while London’s FTSE ended the day down 1.54 percent. Hang Seng ended the day down 2.17 percent while the Sensex ended down 1.82 perent.

The US stock index futures went down sharply when they opened for trading on Monday.While S&P was down 25.8 points, Dow was down by 221 points and Nasdaq by over 47 points.

In the US pre-market trading, sectors such as the banking and natural-resource sectors bore the brunt of the downgrade. United States Steel Corp. slid 5.2 percent to $31.50 in pre-market trading, while Citigroup Inc fell 4.6 percent to $31.90.

The MSCI Asia Pacific Index of shares slid 2.5 percent on the fifth day of losses.

Treasuries rose as stock markets slide sparked demand for government debt.

The weakening sentiment on the equities side sent gold soaring to $1700 an ounce.