The Dow Jones Industrial Average fell about 100 points in
midday trading Thursday. The Dow and other major indexes lost more than 1
percent. The dollar slid while interest rates fell as demand for Treasurys
grew.
The market extended an early drop after the National
Association of Realtors said in morning trading that the number of buyers who
signed contracts to purchase homes fell to a new low in May following a rush of
purchases to meet an April 30 tax credit deadline.
The stock market has been sliding on concerns about the
economy since hitting its 2010 high in April. Investors are worried that they
were too quick to bet on a rebound after major indexes plunged to 12-year lows
in March 2009. The reports Thursday provided more signals that the recovery
will take longer than hoped.
John Canally, economist at LPL Financial in Boston, said
traders were so scarred by the market's crash in 2008-09 that they see a
slowdown as a sign that the economy is going to falter again rather than just
recover more slowly.
In midday trading, the Dow fell 104.14, or 1.1 percent,
to 9,669.88. The broader Standard and Poor's 500 index fell 12.00, or 1.2
percent, to 1,018.71, and the Nasdaq composite index fell 24.60, or 1.2
percent, to 2,084.64.
The Dow dropped 10 percent for the April-June quarter,
while the S and P 500 index fell 11.9 percent.
With the market so unsettled, investors are giving up
potential big gains in stocks and opting for the smaller but safer gains that
can be made in bonds.
The yield on the benchmark 10-year Treasury note, which
moves opposite its price, fell to 2.91 percent from 2.94 percent late
Wednesday. Its yield fell below 3 percent this week for the first time in more
than a year, a sign bond investors are concerned the economy could slip back
into recession.
The Russell 2000 index of smaller companies fell 11.98,
or 2 percent, to 597.51.
Britain's top shares hit a 10-month closing low on
Thursday. The FTSE 100 fell 111.12 points, or 2.3 percent, to 4,805.75 - its
lowest close since Sept. 3, 2009.
