By Adam Samson
FOX Business: Traders fled equities in search of safer havens like Treasury bonds igniting a chain of selling that sent the major market averages plunging as much as 3.
Todays Markets
As of 12:30 p.m. ET the Dow Jones Industrial Average fell 300 points or 2.5 to 11596 the S&P 500 slipped 34.7 points or 2.8 to 1225 and the Nasdaq Composite slid 79.1 points or 2.9 to 2613. The FOX 50 tumbled 20.1 points or 2.3 to 881.
Uneasiness on Wall Street was high on Thursday. Traders piled up into Treasury bonds seen as safe-haven during tumultuous time. Indeed Treasury yields on 10-year Treasury securities dipped below 2.5 -- the lowest since November.
The VIX sometimes referred to as a gauge of fear surged 12. The broad S&P 500 dived into the range of a correction in intra-day trade which is defined as a 10 move from a recent high. Both the Nasdaq & Dow are close to hitting a point of correction as well.
Gold which as seen considerable buying amid the volatility in the equity markets actually pared gains and dipped $13.10 or 0.78 to $1654 a troy ounce.
While the selling has been veracious on the day some market participants have seen the drastic selling as excessive.
The speed at which people are marking assets down doesnt match the speed at which the economy has deteriorated said Daniel Greenhaus chief global strategist at BTIG.
With the debt ceiling raised focus on Wall Street has shifted to the beleaguered labor market.
The number of individuals applying for first-time unemployment benefits fell to 400000 from a revised 401000 in the prior week slightly better than the
405000 economists were expecting. However claims have remained right around the 400000-level for weeks leading economists to question the robustness of the recovery in the labor markets.
The pace of firings are moderating but are still too elevated at this point of the economic cycle wrote Peter Boockvar managing director at Miller Tabak Co. in a research note.
Other analysts see more improvement in the labor market: This report and recent trends in claims data suggest that the softness in the labor market may be beginning to subside analysts at Barclays Capital noted.
Energy markets were in free fall amid concerns that demand for energy may wane coupled with strength in the greenback.
Light sweet crude plunged $4.29 or 4.8 to $87.40 a barrel. Wholesale RBOB gasoline slumped 14 cents or 4.7 to $2.80 a gallon.
Energy and materials stocks like Chevron (CVX: 98.55 -4.21 -4.10) and Alcoa (AA: 13.61 -0.65 -4.56) were the biggest drag on the Dow. While every major sector was down a strong performance by Kraft Foods (KFT: 35.05 0.75 2.19) helped buoy the non-discretionary consumer sector.
The European Central Bank held its benchmark interest rate steady at 1.5 as was expected. ECB President Jean-Claude Trichet also said he expects the central bank to hold on to an accommodative monetary-policy stance and sees a slowdown in economic growth. The euro tumbled on Trichets commentary amid concerns interest rates that are held lower low in the longer-term will negatively affect demand for the currency.
The euro fell 0.94 against the U.S. dollar while the greenback jumped 1.4 against a basket of world currencies.
The Labor Departments monthly employment report -- which is widely considered to be one of the most important gauges of the economy -- is slated for release on Friday. The unemployment rate is forecast to have held steady at 9.2 with the economy adding 57000 jobs. This comes on the heels of a report showing the labor market essentially stalled in the prior month.
Market participants are sitting on pins and needles with respect to Fridays jobs report Greenhaus said.
A report released on Wednesday showed the private sector adding 114000 jobs last month modestly topping analysts estimates.
On the corporate front Kraft Foods unveiled plans to spin off its North American grocery unit by the end of 2012. The Dow-component also posted quarterly
profits that topped Wall Streets expectation.
General Motors (GM: 26.63 -0.54 -1.99) posted second-quarter earnings of $1.54 a share dashing past the consensus forecast of $1.20. The automakers revenue came in at $39.4 billion also topping forecasts of $36.7 billion.
Prices at the pump held steady for another night although remain elevated as compared to last year. A gallon of regular costs $3.70 on average nationwide up from $3.56 last month and well higher than the $2.74 drivers paid last year according to the AAA Fuel Gauge Report.
Foreign Markets
The English FTSE 100 fell 1.8 to 5520 the French CAC 40 dipped 1.6 to 3398 and the German DAX fell 1.1 to 6566.
In Asia the Japanese Nikkei 225 gained 0.23 to 9659 and the Chinese Hang Seng slipped 0.49 to 21885.
