Jitters over the global economy and a steep drop in the price of crude oil knocked U.S. stocks lower for the fourth day in a row Thursday.
While stocks ended lower, they recovered somewhat from far steeper losses earlier in the day. The Dow Jones industrial average dropped 254.56 points, or 1.6 percent, to 15,660.18. The average had been down as much as 411 points.
The Standard & Poor's 500 lost 22.78 points, or 1.2 percent, to 1,829.08. The Nasdaq composite fell 16.76 points, or 0.4 percent, to 4,266.84.
The drop in the U.S. followed large losses around the world and left all three major U.S. indexes down at least 10 percent since the beginning of the year.
The latest slump reflected heightened concerns that global economic growth is slowing, even as Federal Reserve Chairman Janet Yellen reiterated her confidence in the U.S. economy in testimony to Congress on Thursday.
"A lot of people are having trouble assessing the true value of stocks," said J.J. Kinahan, TD Ameritrade's chief strategist. "What it says to me is we're going to continue with volatility."
Financial companies were among the biggest decliners as anxiety rose that interest rates in the U.S. and elsewhere would remain low and sap bank profits. The price of oil tumbled to $26.21, its lowest level since May 2003. Investors fled to the traditional havens of bonds and precious metals. Gold jumped 4.5 percent.
Investors have become increasingly worried that the mounting market turmoil could put a brake on the global economy at a time it is already struggling with a number of matters, including China's slowdown, low inflation and plunging energy markets.
Yellen, in her second day of testimony before U.S. lawmakers Thursday, acknowledged that global economic pressures pose risks to the U.S. economy but said it's too early to tell whether those risks are severe enough to alter the central bank's interest-rate policies.
That failed to reassure investors hoping the Fed would signal that rate increases are off the table for this year, said Katie Nixon, chief investment officer at Northern Trust Wealth Management.
"The market is disappointed in that and looking for more direct comment on perhaps pushing out rate increases," Nixon said. "She had the opportunity to do that, so that's obviously feeding into market anxiety."
All 10 sectors in the S&P 500 index closed lower. Financial stocks fell the most, down 3 percent.
Citigroup fell $2.43, or 6.5 percent, to $34.98, while Bank of America shed 82 cents, or 6.8 percent, to $11.16. JPMorgan slid $2.45, or 4.4 percent, to $53.07.
Benchmark U.S. crude oil fell for the sixth day in a row, sliding $1.24, or 4.5 percent, to $26.21 a barrel in New York. Brent crude, a benchmark for international oils, dropped 78 cents, or 2.5 percent, to $30.06 a barrel in London. Natural gas fell 5 cents, or 2.5 percent, to $1.99 per 1,000 cubic feet.
The drop in oil and natural gas prices sent shares in several energy companies lower. Southwestern Energy lost 43 cents, or 5 percent, to $8.15, while NRG Energy shed $1.11, or 10.4 percent, to $9.59.
In Europe, Germany's DAX dropped 2.9 percent, while France's CAC 40 slid 4.1 percent, dragged down by a 13 percent drop in the shares of bank Societe Generale, which warned about its profits. Britain's FTSE 100 shed 2.4 percent.
In Asia, some indexes reopened after a holiday and caught up with several days of market turmoil. Hong Kong's Hang Seng dived 3.9 percent after opening as much as 5 percent lower. South Korea's Kospi staged its biggest daily drop in nearly four years, down 2.9 percent. China and Taiwan will reopen on Monday. Japan was closed Thursday for a separate public holiday.
Bond prices rose, driving the yield on the 10-year Treasury down to 1.66 percent from 1.71 percent late Wednesday.
Gold surged $53, or 4.5 percent, to $1,247.80 an ounce, while silver climbed 51 cents, or 3.4 percent, to $15.79 an ounce. Copper, an industrial metal that will often rise and fall along with investors' optimism about the global economy, fell 2 cents, or 1 percent, to $2.01 a pound.
Business on 02/12/2016