Major U.S. stock indexes veered sharply lower in morning trading Thursday as concerns about global economic weakness intensified. The latest slide followed steep market declines all around the world. Financial stocks were among the biggest decliners as investors worried that interest rates in the U.S. and elsewhere would remain low.
KEEPING SCORE: The Dow Jones industrial average dropped 290 points, or 1.8 percent, to 15,624 as of 11:04 a.m. Eastern Time. The Standard & Poor's 500 lost 28 points, or 1.5 percent, to 1,823. The Nasdaq composite fell 49 points, or 1.2 percent, to 4,234.
GLOBAL JITTERS: Investors are increasingly worried that the mounting market turmoil could put a brake on the global economy at a time it is already struggling with a litany of issues — from China's slowdown, low inflation and plunging energy markets. Fed Chair Janet Yellen, giving her semiannual report to Congress on Wednesday, cautioned that global weakness and falling financial markets could depress the U.S. economy's growth. That could, in turn, slow the pace of Fed interest rate hikes. Yellen was scheduled for a second day of testimony before U.S. lawmakers on Thursday.
THE QUOTE: Investors are losing confidence in central bank policies, said Anthony Valeri, investment strategist at LPL Financial.
"(Central banks) have done all they can do and these policies may not improve economic growth or may not support financial markets," he said.
SECTOR VIEW: All 10 sectors in the S&P 500 index were down. Financials stocks fell the most, down 2.7 percent. Energy stocks slumped 2.1 percent as oil prices continued to decline.
BANK SLUMP: Several major banks were trading lower. Citigroup fell $1.97, or 5.3 percent, to $35.44, while JPMorgan slid $2, or 3.6 percent, to $53.52. Bank of America shed 69 cents, or 5.8 percent, to $11.29. Wells Fargo lost $1.12, or 2.4 percent, to $45.05.
MORTGAGE HANGOVER: Morgan Stanley fell 4.3 percent after it agreed to pay $3.2 billion to settle federal and state claims that the lender engaged in practices that contributed to the 2008 financial crisis, including misrepresentations about the value of mortgage-backed securities. The stock slid 97 cents to $21.73.
OIL IMPACT: Another drop in oil prices sent shares in several energy companies lower. Southwestern Energy lost 65 cents, or 7.6 percent, to $7.93, while Marathon Petroleum fell $2.02, or 6.4 percent, to $29.65. Devon Energy shed $1.23, or 5.7 percent, to $20.40.
STRONG QUARTER: Cisco Systems jumped 8 percent a day after the seller of routers, switches, software and services reported better-than-expected quarterly results and announced a stock buyback plan and dividend increase. The stock climbed $1.81 to $24.32.
OVERSEAS MARKETS: In Europe, Germany's DAX dropped 2.1 percent, while France's CAC 40 slid 3.1 percent, dragged down by a 13 percent drop in the shares of bank Societe Generale, which warned about its profits. Britain's FTSE 100 shed 1.6 percent. In Asia, some indexes reopened after a holiday and caught up with several days of market turmoil. Hong Kong's Hang Seng dived 3.9 percent after opening as much as 5 percent lower. South Korea's Kospi staged its biggest daily drop in nearly four years, down 2.9 percent. China and Taiwan will reopen on Monday. Japan was closed Thursday for a separate public holiday.
ENERGY: Benchmark U.S. crude oil was down 98 cents, or 3.6 percent, to $26.47 a barrel in New York. The contract lost 49 cents on Wednesday. Brent crude, a benchmark for international oils, was down 54 cents, or 1.8 percent, to $30.30 a barrel in London.
BONDS AND CURRENCIES: Bond prices rose. The yield on the 10-year Treasury slid to 1.59 percent from 1.71 percent late Wednesday. In currency markets, the dollar took a dive as investors adjusted their expectations for fewer interest rate increases in the U.S. It fell to 111.93 yen from 113.35 yen. It also fell against the euro, which was up to $1.1339 from $1.1282.
Updated Date: Feb 11, 2016 22:40 PM