US stocks plunge in opening trade

NEW YORK: US stocks plummeted Tuesday in opening trade as investors returned from a long holiday weekend worried about European debt problems and the health of the US economy.

The Dow Jones Industrial Average dived 268.67 points (2.39 percent) to 10,971.59 in the first 15 minutes of trade. The Dow has had triple-digit losses in the past two trading days.

The broader S&P 500 slid 29.33 points (2.50 percent) to 1,144.64, while the tech-rich Nasdaq Composite tumbled 51.17 points (2.06 percent) to 2,429.16.

The early losses on Wall Street followed steep losses on European markets on Monday, which were triggered by fears that Europe's efforts to resolve its debt crisis were faltering.

"US stocks are under solid pressure in early trading on the heels of a sharp sell-off in Europe yesterday amid the festering eurozone sovereign debt crisis uneasiness," analysts at Charles Schwab said in a research note.

"Also, concerns about the health of the US economy are weighing on sentiment following Friday's disappointing labor report."

No new jobs were created in the United States in August, according to that report, which stoked fears that the US economy might be slipping into a new recession.

Banking stocks were hit especially hard on Tuesday morning, with Citigroup plunging 6.0 percent, Bank of America falling 4.8 percent and JPMorgan Chase slumping 4.2 percent.

Bond prices, which were already close to record highs, climbed even higher as investors fled to the traditional safe haven of US Treasurys.

The yield on the 10-year Treasury note fell to 1.95 percent from 2.00 percent late Friday, while that on the 30-year bond dropped to 3.22 percent from 3.31 percent.

Bond prices and yields move in opposite directions.

Copyright AFP (Agence France-Presse), 2011