Dow Plunges Over 200 Points In First 2 Minutes
May 25, 2010
The Dow Jones Industrial Average fell almost 150 points, led by Kraft [KFT 28.0481 -0.8819 (-3.05%) ], Caterpillar [CAT 57.4111 -1.8089 (-3.05%) ] and Alcoa [AA 10.87 -0.22 (-1.98%) ]. Home Depot [HD 33.23 0.01 (+0.03%) ] was the only gainer on the Dow.
The S&P 500 and Nasdaq both fell more than 1 percent.
Losses steadied, however, after about 15 minutes of trading and coinciding with an NBC report that North Korean troops were not on military alert despite tensions with the South.
The CBOE Volatility Index [VIX 39.93 1.61 (+4.2%) ] climbed back above 40 as fear spread quickly that geopolitical and economic storms across the globe would weigh on growth and sap the stock rally that sent major indexes up more than 70 percent from the March 2009 lows.
“If you’re sitting as an investor today saying, ‘Oh my God, what have I done?’ it means you’re taking on too much risk,” advised Nicholas Colas, chief market strategist at ConvergEx, an institutional investment advisory firm in New York. “You have to make sure you’re positioned with your portfolio not to have to make big decisions on big down days.”