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Wall St turns negative for year
Published 9:20 PM, 16 Mar 2011 Last update 7:23 AM, 17 Mar 2011


Reuters

NEW YORK - The S&P 500 and Nasdaq turned negative for the year on 2011's highest volume and the Dow suffered its worst performance since August as investors sold stocks on fears Japan's nuclear crisis could worsen.

The Dow Jones industrial average dropped 242.12 points, or 2.04 per cent, to 11,613.30, according to the latest available figures.

The Standard & Poor's 500 Index lost 24.99 points, or 1.95 per cent, to 1,256.88.

The Nasdaq Composite Index fell 50.51 points, or 1.89 per cent, to 2,616.82.

In another headwind for equities in a different part of the globe, escalating violence in the Middle East caused Brent crude to climb 1.9 per cent.

"What we're seeing with oil is the greatest supply risk in years. What we're seeing in Japan is unlike anything we've seen before," said Phil Flynn, senior market analyst with PFG Best in Chicago.

Flynn said Wall Street's fear gauge could be headed back toward a significant marker.

"Based on the events now, it isn't impossible that the VIX could get up to where it was at the height of the (financial) crisis. It could triple," he said.

Earlier, the CBOE market volatility index jumped 15 per cent and is up more than 40 per cent this week. The IShares MSCI Japan Index Fund, which owns Japanese stocks, slid 4.1 per cent to $US9.62. The ETF is down 11 per cent this week due to uncertainties from the crisis, which began after Friday's earthquake and tsunami.

Rising radiation levels in Japan caused workers to withdraw briefly from a nuclear power plant and a helicopter was unable to drop water to cool the most troubled reactor. Nikkei dollar-denominated futures were down 5.2 per cent.

Nuclear-related stocks slid on bets the crisis would cripple the industry's growth worldwide. Cameco Corp shed 9.1 per cent to $US29.55 and Shaw Group dropped 3.7 per cent. The Global X Uranium ETF lost 6.1 per cent.

"We're not recommending any new purchases of uranium stocks," said Joshua Brown, vice president of investments at Fusion Analytics in New York. "The growth picture there is night and day compared with last week."

US-listed shares of Toyota Motor Co dropped 1.4 per cent to $US80.24 after the automaker said it would continue to halt operations at its 12 main Japanese assembly plants.

Both Apple Inc and International Business Machines Corp sank after both received analyst downgrades. Apple lost 3.8 per cent to $US332.38 and IBM was off 3.9 per cent to $US152.77.

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