US Markets

Stocks tumbled amid growing fears of a global recession, as investors confronted a grim mix of U.S. economic data and fresh concerns about Europe's banks. The Dow Jones Industrial Average ended down 419.63 points, or 3.68%, to 10990.58. The Standard & Poor's 500-stock index dropped 53.24 points, or 4.46%, to 1140.65, while the Nasdaq Composite lost 131.05 points, or 5.22%, to 2380.43. In the flight to safety Thursday, investors piled into gold, which jumped to a record of $1,818.90 a troy ounce.

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In the Treasurys market, the yield on the benchmark 10-year note briefly dipped below 2% in intraday trading for the first time since at least 1954, as investors sought refuge in U.S. debt. The heaviest selling came in energy and materials stocks, as commodities prices sank. Among Dow components, United Technologies fell $3.93 a share, or 5.5%, to $68.12; Alcoa lost 75 cents, or 6.1%, to 11.51; and Caterpillar tumbled 4.31, or 4.9%, to 88.33. Among big oil firms, Chevron lost 4.44, or 4.6%, to 93.24 and Exxon Mobil was off 3.22, or 4.3%, to 70.94.

Bank stocks were also under significant pressure. Bank of America was the biggest decliner among the Dow components, tumbling 45 cents, or 6%, to 7.01, while J.P. Morgan Chase lost 1.38, or 3.8%, to 35.19. Citigroup fell 1.87, or 6.3%, to 27.98 while Morgan Stanley declined 81 cents, or 4.8%, to 16.20.

Hewlett-Packard, one of the biggest stock laggards on the day, briefly reversed its morning slump after reports that the world's biggest computer maker will spin off its personal-computer business and is close to a $10 billion deal to acquire U.K. software firm Autonomy. H-P, which took the unusual step of reporting quarterly earnings during trading hours, fell 1.88, or 6%, to 29.51 despite earnings and revenue coming in largely in line with analyst expectations.

Transportation stocks, which are particularly sensitive to economic growth concerns, were hit hard. The Dow Jones Transportation Average, an index of 20 railroad, airline and shipping stocks, tumbled 6.1%. American Airlines parent AMR fell 26 cents, or 6.8%, to 3.54; Kansas City Southern dropped 6.49, or 12%, to 47.47; and FedEx lost 4.67, or 5.9%, to 74.46. All 10 sectors of the S&P 500 were lower, with 98% of the 500 component stocks falling.

The CBOE Market Volatility Index, the fear gauge known as the VIX, surged 37%. Trading volumes were in line with recent trading days, which have seen a jump in activity. About 6.3 billion shares changed hands in New York Stock Exchange composite volume, well above the daily average this year of about 4.3 billion shares.

European Markets

Stock markets across Europe were slammed Thursday, ending the day with sharp losses as bank shares led the way lower on fears about global growth and the euro-zone debt crisis. The Stoxx Europe 600 index slumped 4.8% to close at 226.70 as fear again gripped the market after three fairly calm days. The index extended its plunge after disappointing U.S. economic data.

Europe's heavy losses were spread across all countries and market sectors, though banks faced some of the biggest falls. Shares of Barclays PLC sank 12% in London, Societe Generale fell 12% in Paris and Dexia SA slumped 14% in Brussels. The losses for SocGen and Dexia came even after a ban on short-selling introduced last week.

The Wall Street Journal also reported Thursday that U.S. regulators are stepping up their scrutiny of European banks amid worries that they could face funding difficulties in the U.S. The report came a day after data from the European Central Bank showed an unnamed institution had borrowed $500 million the first time it had made such a dollar-denominated loan since February.

Losses were particularly heavy in Germany, where Commerzbank AG fell 10% and car makers also tumbled on global growth worries. Shares of Volkswagen AG fell 7% and BMW AG dropped 7.8%. The DAX 30 index slumped 5.8% to close at 5,602.80. Italy's FTSE MIB index fell 6.2% to 14,970.42, as shares of car maker Fiat SpA lost nearly 12% of their value. Switzerland's Holcim sank 8%. The cement producer said second-quarter earnings fell 13% as a strong Swiss franc and high raw-material prices hurt profitability.

French rival Lafarge SA also dropped 7.2%, contributing to a 5.5% drop for the CAC 40 index, which settled at 3,076.04. Other noteworthy decliners in Paris included Veolia Environnement SA, which fell 8.7% after a downgrade by UBS to neutral from buy. Vallourec SA tumbled 9.8% after Goldman Sachs cut the steel-tubing producer to a neutral rating from buy previously, citing higher costs.

In London, mining stocks ranked alongside banks as the worst performers, reflecting the worries about global growth. Xstrata PLC fell 10% after the firm and its partners approved further investment to expand Cerrejon, a coal mine in Colombia. The FTSE 100 index ended 4.5% lower at 5,092.23.

Asian Markets

Asian stock markets ended lower Thursday as worries about the global economic outlook trumped the bargain appeal. Japan's Nikkei Stock Average fell 1.3% to 8943.76, its lowest finish since March 15. Familiar concerns over the yen's strength hit the nation's exporters, along with fears global demand could decline. South Korea's Kospi snapped out of a two-day winning streak to close down 1.7% at 1860.58,

Taiwan's Taiex dropped 1.6% to 7614.97, Hong Kong's Hang Seng Index shed 1.3% to 20016.27, and China's Shanghai Composite declined 1.6% to 2559.47. India's Sensex fell 2.2% to 16469.79, down more than 20% from November's high the definition of a bear market. The day's losses followed a lackluster session on Wall Street in which technology stocks were punished over Dell Inc.'s lowered outlook.

Stock losses in Tokyo were spread across most exporters, as the U.S. dollar remained below Y77. Mazda Motor tumbled 5.7%, Nissan Motor dropped 3.7% and Hitachi slid 2.4%. Worries that debt problems in the key U.S. and European markets could hurt demand also pressured exporters elsewhere, with LG Electronics down 6.1% and Hyundai Motor off 4.5% in Seoul and Nanya Technology down the 7% limit and in Taipei. Feeling the Dell tech chill, Acer slipped 5.7% in Taipei and Lenovo Group gave up early gains to end 6.5% lower in Hong Kong.

Commodities

Base metals limped to a sharply lower close on the London Metal Exchange Thursday as a broad-market sell-off sent investors fleeing risky assets. At the close, LME three-month copper was 2.1% lower at $8,769 a metric ton, while thinly traded tin fell the most, slumping 5.2% to $22,750/ton. Crude oil futures tumbled 5.9% Thursday as weakening economic data in the U.S. sparked renewed fears of a global downturn.

Declines across financial markets sent oil as low as $81.86 a barrel before recovering slightly, as futures reverted to the sharp peaks and valleys that have typified trading days over the past month. Light, sweet crude for September delivery settled $5.20 lower at $82.38 a barrel on the New York Mercantile Exchange.

Brent crude on the ICE futures exchange ended $3.55 lower at $107.05 a barrel. Fears that prospects for growth in the U.S. and Europe were slipping pushed gold futures Thursday to their third record in as many days, as investors fled sinking equities markets and turned to perceived refuge assets.

The most actively traded contract, for December delivery, rose $28.20, or 1.6%, to $1,822 a troy ounce on the Comex division of the New York Mercantile Exchange. Futures earlier rose as high as $1,829.70, an intraday record for the most active contract. August-delivery gold rose $27.70 to settle at $1,818.90, a record for the nearby contract.

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