Hot & Cold Sectors
Tracking the major movements across the best & worst performing industry sector indexes.
Dow 30 Stocks
Top Gainers & Losers
Major Indexes & Stocks to Watch

MORE U.S. INDEXES

» More

TOP HEADLINES

» Markets | Economy | Companies

- Stocks Looking Past Europe for a New Driver of the Rally

FEATURED SLIDESHOWS

» More

Industries Bouncing Back
Here are some industries that are making a comeback after being hit hard by the recession.
Biggest Holders of US Debt
See who owns the most U.S. government debt.
Romantic Luxury Homes
Romance, like beauty, is often in the eye of the beholder.

MOST POPULAR

News

Blog Posts

Videos

SPECIAL REPORTS

» More

- Road Warriors
  All the gadgets and gear a savvy frequent traveler needs to navigate the global economy.

HOT ON FACEBOOK

Stocks Get Hammered as Market Jitters Escalate

Published: Thursday, 20 May 2010 | 5:35 PM ET

Text Size

By: Cindy Perman, JeeYeon Park

Stocks logged their biggest drop of the year Thursday as investors worried about two events coming Friday — a German vote on the EU bailout and options expiration.

Plus, a vote in the Senate to end debate on financial reform cleared the path for a final vote tonight or tomorrow, which added another layer of selling pressure.

Major U.S. Indexes

.DJIA

.NCOMP

.SPX

The Dow Jones Industrial Average shed 376.36, or 3.6 percent, to close at 10,068.01, finishing at its session lows after the selloff accelerated in the final minutes of trading.

All 30 Dow components finished lower, led by Bank of America [BAC Loading... () ], Alcoa [AA Loading... () ] and GE [GE Loading... () ].

The S&P 500 lost 3.9 percent and the Nasdaq fell 4.1%. The CBOE volatility index, widely considered the best gauge of fear in the market, jumped over 25% and was above 44 at the closing bell, its highest level in over a year.

Several market pros offered optimism earlier today but in the last half hour of trading, economist Nouriel Roubini, aka "Dr. Doom," said he sees stocks going down another 20 percent and that cash is the safest place to be.

FOR INVESTORS

All three major indexes are now in correction territory, down over 10 percent from their April highs. At this rate, the market is on track for its worst month in over a year.

The Nasdaq was the hardest hit of the three today as most of the tech giants took a beating, with Apple, Google and Intel all down around 4 percent.

The market started off jittery amid worries about Germany acting alone in imposing the ban on some naked short selling and a disappointing jobless-claims report.

European stocks lost more than 2 percent amid worries that Germany's unilateral move banning some naked short selling indicates an inability for the nations to agree and solve their problems. Plus, there were worries that the ban would be extended to the entire euro zone.

Initial claims for unemployment benefits shot up by 25,000 to 471,000 last week, which rattled an already jittery market as economists had expected claims to drop to 440,000. Meanwhile, the Philadelphia Fed reported its gauge of regional manufacturing activity dropped to 21.4 in April, slightly more than expected, from 20.2 in March. And leading indicators fell 0.1 percent in April, the first decline in a year.

Financials took a hit, with Bank of America [BAC Loading... () ] off more than 6 percent and Citigroup [C Loading... () ] off over 4 percent, after the financial regulatory reform bill cleared a key hurdle in the Senate.

Rochdale analyst Dick Bove said banks are still attractive.

Banks "may fall another 10% to 12% reflecting market fears but they are still very attractive investments," Bove wrote in a note to clients. "Longer term, I still expect that these stocks will grow in multiples, not percentages."

Dave Lutz, managing director at Stifel Nicolaus Capital Markets, said there are a "tremendous number of indicators" that suggest the whole market is oversold and "a sharp rally is at hand."

He said it "could be a bit of a sloppy afternoon" but the rally could come tomorrow when Germany votes on the $1 trillion EU bailout — depending on the outcome.

Art Cashin, head of floor operations at UBS, said there's also buzz on the floor that Germany and other markets may be closed Monday for a religious holiday, which could be good for the market as it increases the chances of the EU pulling off some unified measures. Cashin pointed out that what really rattled the market was Germany acting alone.

However, May individual equity options and some stock index options expire at the close of trading Friday, which could add some volatility to the market.

The dollar fell against the euro, after being down on the debt and financial regulation worries earlier.

But commodity prices remained lower, with crude oil ending at $68.01 a barrel and gold settling at $1,187.80 an ounce.

Treasurys jumped on the stock-market turmoil, particularly the longer-dated securities.

In earnings news, office-supply chain Staples [SPLS Loading... () ] reported its profit rose 32 percent but delivered a disappointing outlook.

Sears [SHLD Loading... () ] shares fell 11 percent after the retailer reported a 38 percent drop in profit as higher costs and more markdowns weighed on margins.

Williams-Sonoma [WSM Loading... () ] shares climbed after the home-goods chain reported a better-than-expected profit and boosted its outlook for the year as consumers started to show signs of a comeback.

GameStop [GME Loading... () ] ended lower after an earlier pop as the videogame retailer posted stronger net income, boosted by strong sales of popular games like "Battlefield Bad Company 2" and "God of War III," but a disappointing outlook killed the stock.