Stocks Plunge on Bad Economic News

Wall Street Journal reports:

Stocks plunged Wednesday, suffering their biggest drop in almost a year, as a slew of downbeat reports prompted fears the economic recovery was running out of steam.

The Dow Jones Industrial Average closed down 279.65 points, or 2.2%, to 12290.14, the biggest point drop since June 4, 2010. All 30 of the blue-chip components finished in negative territory.

The Standard & Poor's 500-stock index fell 30.65 points, or 2.3%, to 1314.55, dragged down by the financial, industrial and material sectors, which each fell more than 3%. Only 10 stocks in the S&P 500 finished in positive territory. The technology-oriented Nasdaq Composite fell 66.11 points, or 2.3%, to 2769.19.

"There isn't a lot of confidence to begin with, so it doesn't take much to push people away from the table," said Ted Weisberg, a trader with Seaport Securities.

Investors kicked off June on a negative note after several economic data points weighed on sentiment. Concerns about unemployment arose after a reading on private-sector job growth came in well below economists' expectations, fueling anxiety on Wall Street about the government's monthly jobs report Friday.

Pessimism continued to mount after the Institute for Supply Management said the manufacturing sector slowed sharply in May. U.S. auto sales also dropped in May from a month earlier, the auto industry's first significant setback in more than 18 months.

The selling accelerated in the late afternoon after Moody's Investors Service again cut the rating of Greek government debt.