Wall St sinks on Eurozone concerns; Dow down 376 pts

In the US markets stocks logged their biggest drop of the year ahead of the German vote on the EU bailout and options expiration. Plus, a vote in the senate to end the debate on financial reform cleared the path for a final vote today, which added another layer of selling pressure.

The market started off jittery amid worries about Germany acting alone in imposing the ban on some naked short selling and a disappointing jobless-claims report.

The Dow shed more than 370 points, finishing at its session lows after the selloff accelerated in the final minutes of trading. The S&P 500 lost nearly 4%, while the Nasdaq was the hardest hit as most of the tech giants took a beating, with Apple, Google and Intel all down around 4%.

All three major indices are now in correction territory, down over 10% from their April highs. At this rate, the market is on track for its worst month in over a year. Volume was nearly double the daily average, with more than 2 billion shares changing hands on the New York stock exchange. Declines outpaced the advances in a 30 to 1 ratio.

The CBOE volatility index jumped over 25% and was above 45 at the closing bell, its highest level in over a year. All 30 Dow components finished lower, led by Bank of America, Alcoa and GE.

At closing bell, the Dow closed more than 3% down at 10,068, the S&P 500 shut shop at 1,071 and the Nasdaq lost more than 4% to end at 2,204.

Initial claims for unemployment benefits shot up by 25,000 to 471,000 last week, which rattled an already jittery market as economists had expected claims to drop to 440,000.

Meanwhile, the Philadelphia fed reported its gauge of regional manufacturing activity dropped to 21.4 in April, slightly more than expected, from 20.2 in March. And leading indicators fell 0.1% in April, the first decline in a year.

The euro has risen against the dollar on speculation that the european monetary officials may intervene to prop up the single currency and on short-covering.

In the commodity space, global economy fears pushed the CRB to the lowest since September last year. Crude continues to trade lower just below the USD 70 mark. The NYMEX June contract which expired yesterday fell to USD 64 as positions rolled & squared.

Copper prices dropped to the lowest level in 14 weeks on mounting signs the global economic recovery is fading. Other metals like aluminium and zinc also traded lower.



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Src: Economictimes, Moneycontrol, Smartinvestor, DP blog and etc