US stocks posted their worst day since 7 November yesterday as big declines in the price of gold, oil and other commodities fed a broad selloff in equities.
Selling accelerated late in the session as reports of explosions in Boston near the finish line of the Boston Marathon added to investors’ nervousness.
Commodity-related shares led stocks’ losses, with gold suffering its worst two-day sell-off in 30 years following weaker-than-expected Chinese data that fuelled worries about global growth. The SPDR Gold Shares ETF lost 8.8 per cent to $131.31 on record volume.
Total trading volume was the second highest of the year, with about 8.4bn shares changing hands on US exchanges.
Analysts said the stock market had been vulnerable to a pullback, given the sharp gains since the start of the year as well as the Dow’s and the S&P 500’s recent record highs.
“There was a bad Chinese GDP number, which I think spooked people to start, and technical factors. Profit-taking started taking over..” said Uri landesman, president of Platinum Partners in New York. “Late in the day, we were getting hit by reports that there were explosions in Boston. That gets people nervous.”
The Dow Jones industrial average slid 265.86 points, or 1.79 per cent, to 14,599.20 at the close. The Standard & Poor’s 500 Index fell 36.49 points, or 2.30 per cent, to 1,552.36. The Nasdaq Composite Index lost 78.46 points, or 2.38 per cent, to close at 3,216.49.
It was the biggest daily percentage decline for all three indexes since 7 November, when the market sold off following the US presidential election. The biggest declining sectors were energy and materials, with both sectors losing 3.9 per cent.
New York Report