PLEASE NOTE: THIS EDIT CONTAINS CONVERTED 4:3 MATERIAL
Wall Street suffered a market meltdown as investors around the world battle with fresh signs of slowing global growth.
The head-turning drop was swift and severe and reminiscent of the plunges seen in August when the U.S. was on the brink of shutting down, but this time the worries are more widespread.
Paul Larson is chief equity strategist at Morningstar.
SOUNDBITE: PAUL LARSON, CHIEF EQUITY STRATEGIST, MORNINGSTAR (ENGLISH) SAYING:
"The market is basically very worried about a sovereign debt crisis emanating from Europe. You might say that the market is worried about September 2011 turning into something that we had September 2008 with Greece basically playing the role of Lehman Brothers."
A financial disruption would certainly hurt the global economy, which is already showing signs of strain. China's factory sector shrank for a third straight month, the euro zone services industry contracted for the first time in two years and in the U.S., unemployment remains at worrisome levels.
Another reason for the selling: investors point to the Federal Reserve's statement late Wednesday, which said the U.S. economy faces "significant' risks.
SOUNDBITE: PAUL LARSON, CHIEF EQUITY STRATEGIST, MORNINGSTAR (ENGLISH) SAYING:
"The market is re-pricing lower future economic growth. Clearly the market, when you just look at the very low valuations that are being put on stocks, right now, the market is assuming that we are going to indeed enter a second leg of the recession."
But the rout went beyond equities. Crude oil prices dropped over $5 dollars in the biggest percentage drop in more than a month.
And even gold, usually a winner in times of economic uncertainty, fell prey to the selling.
When the dust settled, stocks plunged 3 or more percent with the Dow down just about 400 points.
And in Europe - stocks slumped to their lowest close in over two years.
Conway Gittens, Reuters
