Stocks slide on global worries

Associated Press

Jitters over the global economy and steep declines in bank stocks knocked U.S. stocks lower for the fourth day in a row Thursday.

The slide in the U.S. followed large losses all 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 Chairwoman Janet Yellen reiterated her confidence in the U.S. economy in testimony to congress 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 amid growing anxiety 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.

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.

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 litany of issues, 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 she said it’s too early to tell whether those risks are severe enough to alter the central bank’s interest-rate policies.