Gauges of commodity producers, technology companies and financial firms dropped more than 2 percent to lead declines among all 10 of the main industry groups in the Standard Poor’s 500-stock index. Alcoa, JPMorgan Chase and American Express each lost about 3 percent to lead the Dow Jones industrial average down 134.86 points, or 1.13 percent, to 11,770.73. The Nasdaq closed down 51.62 points, or 1.96 percent, to 2,587.99. The S. P. 500 lost 1.68 percent, or 20.78 points, to close at 1,216.13.
Stocks and commodities extended declines after Reuters quoted a euro area official as saying there were no plans for aid for Italy from the European bailout fund. Republicans and Democrats on Congress’s supercommittee hardened their positions with less than a week until the deadline to propose a plan to cut the deficit.
“It’s just a combination of everything we have been hearing the last two days,” said Thomas Garcia, head of equity trading at Thornburg Investment Management, based in Santa Fe, N.M. “It’s hard to get excited about a market where there are so many negative macro headlines. Concern over the supercommittee, concern about support for Italy — the headlines just keep coming.”
Declines in stocks accelerated after the S. P. 500 slipped below 1,229.10, its closing level on Nov. 9 after that day’s 3.7 percent plunge. Jefferies fell 2 percent, paring a loss of as much as 8 percent, after its chief executive, Richard B. Handler, said Wednesday in an e-mail that turmoil around the company’s shares and publicly traded debt would ease as the fallout dissipated from the collapse of MF Global Holdings.
Some of MF Global’s commodity customers can get an immediate distribution of $520 million, or about 60 percent of their cash collateral, a federal judge ruled on Thursday. The United States Bankruptcy Judge Martin Glenn approved a request to transfer the funds from James Giddens, the trustee overseeing the liquidation of the brokerage firm.
Oil retreated back below $100 a barrel, falling to $98.93 after surging to as high as $103.37 earlier. Silver futures tumbled 6.9 percent to $31.497 an ounce. Gold futures dropped 54 points to 1,719.8. The dollar strengthened against 11 of 16 major peers. The 10-year note rose 10/32, to 100 10/32. The yield fell to 1.97 percent, from 2.0 percent late Wednesday.
“People are running to cash,” said Alec Levine, an equity derivatives strategist at Newedge Group in New York. “The markets, not the policy makers, are controlling events right now and that’s a very dangerous place to be. We’re seeing every type of assets in the world being sold right now except for Treasuries.”
European stocks retreated after French and Spanish borrowing costs climbed at auctions on Thursday, spurring concern about contagion.
Concern about European debt markets and another potential impasse in Washington overshadowed better-than-estimated economic data that limited losses in stocks in early trading.
Applications for jobless benefits decreased 5,000 in the week ended Nov. 12, to 388,000, the lowest level in seven months, Labor Department data showed. Housing starts decreased 0.3 percent, to a 628,00 annual rate in October, according to the Commerce Department, exceeding the median estimate of economists surveyed by Bloomberg News for a drop to 610,000. Building permits, a proxy for future construction, jumped 10.9 percent.
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