Rough day for stocks: S&P 500, Nasdaq erase year's gains

stock marketThe S&P 500 lost nearly 25 points, or 2%, Wednesday. That steep drop put the benchmark index down 0.1% for the year. By Hibah Yousuf, staff reporter


NEW YORK(CNNMoney) -- A sell-off in U.S. stocks accelerated Wednesday, with all three major indexes ending at their lowest levels of 2011.

The S&P 500 and Nasdaq composite erased their gains for the year, while the Dow is barely hanging on, up only 0.3% in 2011.

Trading was extremely choppy as investors tried to sort out disappointing U.S. housing data against the backdrop of developments in Japan.

It didn't help that European Union energy commissioner Günther Oettinger sounded a warning bell about increased risks related to Japan's crippled nuclear reactors at a meeting in Brussels.

Moreover, the U.S. Embassy in Tokyo cautioned American citizens who live within 50 miles of the damaged Fukushima Daiichi nuclear plant to evacuate or take shelter indoors.

"Today's not a good news day, and the market is reacting emotionally," said Fred Dickson, chief market strategist at D.A. Davidson & Co.

The Dow Jones industrial average (INDU) tumbled 242 points, or 2%, with all 30 components of the blue chip index in the red. IBM (IBM, Fortune 500), General Electric (GE, Fortune 500) and American Express (AXP, Fortune 500) led the decline. The index was down almost 300 points at its low for the day.

The S&P 500 (SPX) slipped 25 points, or 2%, to end at 1,256.88. The broad index closed 2010 at 1,257.64.

The Nasdaq (COMP) lost 51 points, or 1.9%, to finish at 2,616.82. The tech-heavy index closed at 2,652.87 last year.

Global concerns also pushed the dollar below ¥80 briefly, hitting ¥79.75, matching the record low hit in April 1995 (More on currencies).

Wall Street's most widely cited measure of volatility, the VIX (VIX), surged more than 20% to 29.40. Earlier, it climbed above 30 for the first time since July.

Dickson is advising his clients to get to the sidelines until the picture of the nuclear threat in Japan becomes clearer.

Wednesday's declines came on the heels of a sharp sell-off in the previous session, which was dominated by worries about Japan.

Japan in crisis: In a televised speech Wednesday, Japan's emperor told citizens not to give up hope as the country grapples with an epic earthquake.

"It's quite rare of the emperor to appear on television, and that has made investors a little nervous," said David Jones, chief market strategist with IG Markets in London.

Prior to the speech, Tokyo's Nikkei index rose 5.7%, rebounding from two days of losses that had drained more than 16% from the index.

The increasingly desperate situation at Japan's nuclear plants is keeping investors on edge.

Stunned by the devastation in Japan, they have been reducing their exposure to risky assets and flocking to investments that are considered safe, including U.S. Treasuries. Investors continued to buy up U.S. government debt Wednesday, sending the 10-year yield down to 3.23% from 3.32% late Tuesday.

Aside from Japan, Moody's Investors Service cut Egypt's rating by one notch, further into non-investment grade quality.

And late Tuesday, Moody's downgraded Portugal's credit rating from A1 to A3 -- a lower investment grade status. And Fitch downgraded Bahrain's debt to below investment grade, following a government clash with protesters.

Asian markets ended higher, with the Shanghai Composite index rising 1.2% and Hong Kong's Hang Seng index edging up 0.1%.

European markets closed sharply lower. The FTSE 100 dropped 0.8%, and France's CAC 40 and DAX in Germany tumbled more than 1%. (World markets)

Economy: The government said new home construction fell 22.5% in February, more than economists were expecting, while the number of permits for future housing construction fell 8.2% to all all-time low.

Separately, the government's Producer Price Index showed that prices at the wholesale level jumped 1.6% in February, which was much more than expected.

Commodities: Oil prices -- which fell nearly 4% on Tuesday -- were higher Wednesday, as concerns about the ongoing turmoil in North Africa and the Middle East were revived. Oil for April delivery gained 80 cents, or 0.8%, to settle at $97.98 a barrel.

Gold futures for April delivery climbed $3.30 to settle at $1,396.10 an ounce.  To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.99%4.00%
15 yr fixed3.06%3.11%
5/1 ARM3.20%3.20%
30 yr refi4.00%4.09%
15 yr refi3.08%3.20%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,827.75 12.81 0.07%
Nasdaq 4,787.32 29.07 0.61%
S&P 500 2,072.83 5.80 0.28%
Treasuries 2.23 -0.03 -1.15%
Data as of 3:54pm ET
Company Price Change % Change
Kinder Morgan Inc 42.32 0.00 0.00%
Apple Inc 119.00 0.00 0.00%
Facebook Inc 77.62 1.99 2.63%
Pfizer Inc 31.10 0.00 0.00%
Bank of America Corp... 17.11 0.00 0.00%
Data as of Nov 26

Sections

The European Parliament has voted to break up Google and weaken its dominance across the region. More

At malls and department stores across America, the faithful are lining up and camping out for deals. More

Two pilots encountered drones while flying over college football games and another pilot saw one while flying over the Hollywood sign. More

Natalie's Cakes and More has raised $84,000 through GoFundMe after protests trash store. More

Retailers are promising big deals this Black Friday, but are the savings actually worth the shopping mayhem? Test your deal-sniffing skills. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.