NEW YORK — Worries about the state of the economy in the U.S. and around the world slammed stocks on Thursday, driving the Dow briefly down more than 400 points and sending the S&P 500 into correction territory.
Bonds soared as investors sought a safe place to park their money.
The Dow Jones industrials average was down about 3 percent. The broader S&P 500 index was down around 10 percent from its May high. The market's so-called "fear index," the CBOE Volatility Index (VIX), jumped to its highest since March.
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"People are throwing in the towel because they can't find relief on any front. There are a lot of worries about the economy," said Milton Ezrati, market strategist at Lord Abbett Co. in Jersey City, New Jersey, which manages $110 billion in assets.
Analysts predicted further losses ahead, given the strong degree of pessimism in the market.
Investors are now nervously focused on the crucial monthly jobs data to be released Friday by the Labor Department. Expectations are not high.
Story: Investors flee stocks for safer groundNonfarm payrolls likely increased 85,000 last month, according to a Reuters survey, after rising only 18,000 in June. The unemployment rate is expected to hold steady at 9.2 percent.
Earlier, the Labor Department reported that weekly initial jobless claims totaled 400,000, less than the 405,000 that was forecast. Investors were disappointed they didn't see more improvement in the labor market gauge.
Story: Jobless claims slip slighty, but remain elevatedOfficials moved to calm markets and ease volatility around the world, with the largest move coming from Tokyo, where the government spent an estimated 1 trillion yen ($13 billion) to stem the strength of itscurrency.
"They're trying to fight a futile battle," said Ankita Dudani, currency strategist at RBS. "It won't have a lasting impact so long as the euro-zone crisis continues and the global (economic) outlook deteriorates."
European stocks tumbled to a level not seen since after the financial crisis in mid-2009, with Italy's equity market firmly in bear market territory, down nearly 30 percent since February, as investors fretted the euro-zone debt crisis was spreading.
Italy's blue-chip FTSE MIB index was suspended about 30 minutes before the close. The index tumbled slightly more than 5 percent. The FTSE 100 in London closed down 3.4 percent.
Story: Why companies aren’t hiring more workersGeneral Motors Co's quarterly profit nearly doubled, beating expectations, as the top U.S. automaker took a larger share of sales globally and raised prices on its vehicles. GM shares dropped, nevertheless.
Quotes delayed 15+ min.
A series of breaks in technical support suggests further losses for stocks, according to market technicians.
"It doesn't look good," said John Kosar, director of research at Asbury Research in Chicago. "Frankly, you have to look pretty hard to find anything technically that looks constructive."
He sees another 5 percent to 8 percent in losses in the S&P 500 from this point.
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