Updated
Stocks slumped on Thursday, giving the Dow Jones industrial average its biggest two-day decline since December 2008, amid investors’ concern that policymakers are running out of tools to avoid another global economic recession.
The Dow Jones industrial average closed down 391.01, or 3.51%; at 10,733.83; the S&P 500 fell 37.20, or 3.19%, ending at 1,129.56; and the Nasdaq composite closed down 82.52, or 3.25%, at 2,455.67. All numbers are preliminary.
The MSCI All-Country World index slid 4.4%, extending a drop from its May 2 high to more than 20%.
The S&P 500 has fallen 17% from a three-year high on April 29 amid concern about a global economic slowdown. Benchmark indexes for the U.S., U.K., Canada, Singapore and New Zealand are the only ones among 24 developed countries that haven’t fallen at least 20% from their highs, entering a bear market.
Stocks began their latest tumble Wednesday afternoon on the Federal Reserve’s assessment that the turmoil caused by Europe’s crisis is taking a toll on the economy. The Fed indicated a willingness to do more to avoid a recession as it made the second move in as many months to lower borrowing costs.
Global stocks fell on data that China’s manufacturing might shrink for a third month in September, the longest contraction since 2009, after a preliminary index of purchasing managers showed measures of export orders and output declined.
Stock futures extended losses after a Labor Department report showed that more Americans than forecast filed first-time claims for unemployment insurance payments last week. Meanwhile, U.S. consumer confidence dropped last week to the weakest point since the recession ended in June 2009, Bloomberg data show. Equities trimmed declines after an index of U.S. leading economic indicators rose more than forecast in August.
