Stocks on Wall Street have fallen the most in one day this year as the US Federal Reserve moves closer to pulling back its stimulus efforts.
Stocks worldwide extended their losses after Fed chairman Ben Bernanke reiterated on Wednesday that it could start winding down its $US85-billion-a-month asset-purchase programme later this year.
Earlier, stocks fell dramatically in Europe and the US gold price also plummeted as Treasury bill rates rose to two-year highs.
The Dow Jones Industrial Average shed 353.87 points, or 2.3%, to 14,758.32, the biggest percentage drop since November 2011 for the blue chips.
The Dow declined 206 points on Wednesday and the two-day plunge was its first back-to-back drops of more than 200 points since November 2011.
The S&P 500 index lost 40.74 points, or 2.5%, to 1588.19. The Nasdaq Composite fell 78.57 points, or 2.3%, to 3364.63.
Investors are also worried about a slowdown in the Chinese economy.
Today’s selloff has been triggered by short-term investors such as hedge funds and accelerated when the S&P 500 broke through the 1600 level.
Despite the improved outlook for the US economy, the prospect of the Fed curtailing the bond-buying efforts that have helped the Dow and S&P 500 hit records this year has sent jitters through the market.
The yield on the 10-year Treasury note, which moves inversely to its price, reached 2.419%, its highest since August 2011.
Gold was hit hard, as its appeal as a hedge against inflation and currency weakness faded. Gold slid 6.4%, to settle at $US1285.90 an ounce, dipping below $US1300 for the first time since September 2010.
Nevil Gibson
Fri, 21 Jun 2013
Fri, 21 Jun 2013
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Wall Street plummets in year's biggest one-day loss
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