U.S. stocks tumbled Monday, sending the Standard & Poor's 500 index to its second-biggest drop of the year while a gauge of market volatility jumped 23%, after China's economy grew at a slower pace than economists forecast.
The Dow Jones industrial average closed down 265.86, or 1.79%, at 14,599.20; the S&P 500 fell 36.48, or 2.3%, ending at 1,552.37; and the Nasdaq composite closed down 78.46, or 2.38%, at 3,216.49. All numbers are preliminary.
Material and energy companies fell the most out of 10 S&P 500 groups. Freeport-McMoRan Copper & Gold, the largest publicly traded copper producer, and Newmont Mining tumbled more than 6.2% as commodities slumped to a nine-month low. Citigroup jumped 1.5% as quarterly profit rose 30%. Sprint Nextel surged 15% after Dish Network offered to buy the company for $25.5 billion.
The S&P GSCI gauge of 24 commodities sank to the lowest level since July. Gold tumbled the most since 1980 and silver plunged as much as 13%. The Chicago Board Options Exchange Volatility index, which measures the cost of using options as insurance against declines in the S&P 500, soared 23% to 14.88. The gauge, known as the VIX, is down 18% this year and reached its lowest level since February 2007 last month.
China's gross domestic product rose 7.7% in the first quarter from a year earlier, the National Bureau of Statistics said in Beijing on Monday. That compared with the 8% median forecast in a Bloomberg survey of economists and 7.9% growth in the fourth quarter. Separate reports showed March industrial production rose less than estimated, while retail-sales growth matched forecasts.
European Central Bank President Mario Draghi said monetary policy can't address the root causes of the sovereign debt crisis and it's up to governments to enact structural reforms.
Profits at S&P 500 companies are forecast to drop 1.4% in the first three months of the year, according to analyst estimates compiled by Bloomberg. That would mark the first year-over-year decrease since 2009.