US STOCKS tumbled three per cent yesterday in the market's worst day since mid-August as a spike in Italian bond yields signalled the European debt crisis had worsened.
All 10 S&P sectors were down, but S&P financials were the hardest hit on worries about European exposure, dropping 5.4 per cent.
US stock markets have grown more chaotic in response to rising volatility in European debt markets, and investors have trouble keeping up with a steady stream of headlines and pricing in how the crisis might play out.
“The market has turned into a derivative of what’s happening in Europe,” said Craig Hodges, president at Hodges Capital Management in Dallas, Texas.
The Dow Jones industrial average was down 389.24 points, or 3.20 per cent, at 11,780.94. The Standard & Poor’s 500 Index was down 46.82 points, or 3.67 per cent, at 1,229.10. The Nasdaq Composite Index was down 105.84 points, or 3.88 per cent, at 2,621.65.
General Motors slid 10.9 per cent to $22.31 after the automaker said it would not break even for the year in Europe.