Stocks take biggest drop this year
Stocks posted their biggest drop of the year on Wall Street Monday. A steep fall in commodity prices led to a widespread sell-off in stocks.
New York — The stock market posted its biggest drop of the year on Monday.
A steep fall in commodity prices led to a widespread sell-off in the stock market, as worries about the global economy resurfaced. The Dow Jones industrial average dropped 265 points, its worst day this year.
The first trigger came from China. News that the world's second-largest economy slowed unexpectedly pummeled oil, copper and other commodities. In the stock market, companies that produce oil and mine for metals fared the worst. A slowdown in China, a huge importer of basic materials like copper, would stymie profits at those companies.
"The weak data out of China is spooking a lot of investors," said Dan Greenhaus, chief global strategist at the brokerage BTIG.
Oil prices hit their lowest level since mid-December, and gold plunged below $1,400 an ounce for the first time in two years as a sell-off in metals continued from last week. Concerns that Cyprus and other troubled European countries may sell gold to raise cash have also weighed on prices for precious metals, Greenhaus said.
The Dow lost 265.86 points to close at 14,599.20, a drop of 1.8 percent. Caterpillar, a maker of heavy equipment used by miners, led the Dow lower, falling 3 percent to $82.27. The Standard & Poor's 500 index slumped 36.48 points to 1,552.37, a loss of 2.3 percent.
It was the biggest drop for the stock market since Nov. 7 — Election Day — last year.