Stocks record their biggest one-day drop since April as volatility spikes.
US stocks plunged on Thursday, with all three major indexes declining in unison as geopolitical risks triggered a fresh bout of risk aversion on Wall Street.
The large-cap S&P 500 Index (NYSEARCA:SPY) plunged 1.2% to 2,444.54, where it closed near session lows.
Ten of 11 sectors contributed to the decline, with information technology, financials and discretionary shares shouldering the heaviest losses.
The Dow Jones Industrial Average (NYSEARCA:DIA) fell 204.69 points, or 0.9%, to 21,844.01. All but a few of the Dow’s 30 index members finished lower.
The Nasdaq Composite Index (NYSEARCA:QQQ) posted the biggest loss in percentage terms, falling 2.1% to 6,216.87.
The Chicago Board Options Exchange (CBOE) Volatility Index (NYSEARCA:VXX) spiked 44.4% to 16.04 – its highest level since May.
The latest decline was triggered by a war of words between the United States and North Korea, with both sides invoking all-out war. Pyongyang has gone as far as planning a military strike on the U.S. controlled island of Guam.
In commodities, oil prices declined sharply on Thursday amid lingering oversupply fears. US West Texas Intermediate (WTI) fell $1.06, or 2.1%, to $48.50 a barrel. ICE Brent futures declined 85 cents, or 1.6%, to $51.85 a barrel.
In economic data, initial jobless claims rose by 3,000 to a seasonally adjusted 244,000 in the latest week, the Labor Department reported. That marked the tenth consecutive week claims were below 250,000.
The Final Word: The threat of war on the Korean peninsula has pushed investors into the safety of precious metals. Gold prices rose further on Thursday and approached $1,300.00 a troy ounce for the first time in two months.