Sovereign debt fears rattle Dow

The stock market turned back the clock Thursday, returning to its Nervous Nelly days of this past spring.

The Dow Jones Industrial Average dropped 268 points or 2.6 percent, its biggest one-day point decline since last April. The Dow now sits at its lowest point since Nov. 4, 2009.

On a percentage basis, the other major indexes swooned even more, with the Standard & Poor's 500 index dropping 3.1 percent and the Nasdaq retreating 3.0 percent.

Last spring, of course, investors worried about big private banks going under. Now, they're concerned some European countries could do the same. Fears about Greece's sovereign debt spread Thursday to the high debts of Spain and Portugal.

Investors also worried about the lackluster job market because weekly unemployment claims rose unexpectedly last week, the Labor Department reported.

That the stock market would pull back after its dramatic run-up last year shouldn't come as a surprise. Some traders have speculated on a 10 percent drop. The Dow is so far down nearly 7 percent since its Jan. 19 high.

What's different about these Nervous Nellie days is that the market is no longer undervalued the way it was last April. And government debt-reduction programs are never as clear-cut as those of big banks and other corporations.