© 2024 Blaze Media LLC. All rights reserved.

Dow Closes Down Nearly 400 Points — Gold and Silver Tumble, Too

Business Insider: It all started yesterday Zero Hedge: 3 reasons why CNBC: Investors are dumping nearly everything ----

NEW YORK (AP) -- Stocks have closed sharply lower after investors sold stocks with abandon, convinced that the U.S. and the world are headed for a new recession.

The Dow Jones industrial average fell as much as 527 points, the second consecutive rout since the Federal Reserve announced a change in strategy for fighting the economic slowdown.

At the close of trading, the Dow was down 391.01 points, or 3.5 percent, at 10,733.83. The Standard & Poor's 500 index fell 37.18, or 3.2 percent, to 1,129.58. The Nasdaq composite fell 82.52, or 3.3 percent, to 2,455.67.

Nineteen stocks fell for every one that rose. Trading volume was high on the New York Stock Exchange, at 6.9 billion.

Oil and metals prices, which rely on economic demand, sank. Traders sought the safety of Treasury bonds.

Gold fell $66.40, or 3.7 percent, to finish at $1,741.70 an ounce on Thursday. Silver, a precious metal that has wider demand for industrial production, plummeted $3.89, or 9.6 percent, to $36.58.

Analysts said that much of the selling was driven by margin calls for hedge funds and other big investors. "We're seeing hedge funds that have to raise cash, and to do that they have to sell what has been working for them so far this year," said Ryan Detrick, senior technical strategist at Schaffer's Investment Research.

Analysts also said that silver had a harder fall because about half of its demand comes from industrial uses. "If the economy contracts at all, there's going to be a lot of excess silver that's sitting in the supply chain," said Phil Streible, senior market strategist at MF Global.

Gold is up about 22 percent for the year. Silver is 16 percent higher than at the start of the year.

Copper, a metal that closely tracks the economic cycle, fell 27.6 cents, or 7.3 percent, to $3.4885. It is down 23 percent for the year.

Oil, wheat and other raw materials fell significantly because of increased fears that a recession would cut demand. Benchmark crude fell $5.41, or 6.3 percent, to $80.51. It was the biggest drop for oil since Aug. 8, when it fell 6.4 percent after Standard and Poor's downgraded the credit rating of the U.S. Oil has dropped 29 percent since April as global growth has slowed.

Wheat contracts fell 33 cents, or 5 percent, to $6.3375 a bushel. Corn lost 35.75 cents, or 5.2 percent, to end at $6.50. Sugar dropped 1.1 cents, or 4.3 percent, to 24.81 cents. And soybeans fell 37.5 cents, or 2.8 percent, to finish at $12.83.

Want to leave a tip?

We answer to you. Help keep our content free of advertisers and big tech censorship by leaving a tip today.
Want to join the conversation?
Already a subscriber?