NEW YORK -- Stocks plunged Wednesday morning, sending the Dow industrials below 10,000 as a deepening pessimism about the global economy swept across Wall Street. Prices also slumped overseas.
The Dow fell nearly 332 points to the 9,958 level in the first half hour of trading, the first time since Oct. 20 it has traded below 10,000. The blue chips regained some ground, but were still down 257.97 at 10,037.83 during Wednesday's first hour, wiping out Tuesday's 82-point advance and compounding Monday's 436-point drop.
The Nasdaq composite fell 32.01 to 1,982.77, while the Standard & Poor's 500 index tumbled 24.88 to 1,172.78.
While sellers have swarmed into the U.S. stock market recently, believing that poor earnings and the weakening economy in this country won't recover in the near future, the prospect of economic crises in other countries worried investors around the globe Wednesday.
Investors were particularly unnerved by news from Japan on Tuesday, when the government admitted the world's second-biggest economy was in a state of deflation.
"The reaction to word that Japan is in a pretty tough spot is perhaps the prevailing issue driving the market down today," said Charles G. Crain, strategist for Spears, Benzak, Salomon & Farrell, a division of Key Asset Management in New York.
Japan's economic situation was significant enough to turn investors' attention away from bleak corporate profits.
"The earnings worries are sort of institutionalized now," Crain said.
Meanwhile, stocks fell hard in Europe, plummeting to 16-month lows. In afternoon trading Wednesday, the markets in Paris, London and Frankfurt were each off upwards of 3.5 percent.
The steep decline is "a continuation of all these earnings woes, and the situation in Japan is really very ugly, and the European markets are at a 28-year low," said Charles Pradilla, chief investment strategist at SG Cowen Securities. "And I think a lot of the reporting about being in a bear market has started to seep through."
"You put all that together and this is more than the market could take," he said.
On Wednesday, Japan's Nikkei stock average closed up 0.2 percent, a day after falling to a 16-year low.
In the United States, while the Federal Reserve has lowered interest rates twice this year and is widely expected to drop rates again next week.
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