THE DAMAGE: The Dow Jones industrial average fell 519.83 points, or 4.6 percent, to 10,719.94. It was the Dow’s ninth biggest drop in history and the third time it fell more than 500 points in the last five trading days. The blue-chip index gave up all its gains ? and then some ? from Tuesday. The Standard & Poor’s 500 index fell 51.77, or 4.4 percent, to 1,120.76. The Nasdaq composite fell 101.47, or 4.1 percent, to 2,381.05.
THE ALTERNATIVES Gold rose above $1,800 per ounce for the first time. It closed up, $41.30, to $1,784.30 per ounce. The 10-year Treasury note, which has also served as a haven, also rose sharply. Its yield fell to 2.11 percent. Investors have bought U.S. government debt even after S&P stripped the United States of its top credit rating, AAA, last week.
THE WORRIES: Investors’ attention returned to the weak global economy and to Europe’s debt problems. Concerns have grown that Spain or Italy could become the next European country unable to repay its debts. On Wednesday, worries rose that France could lose its top AAA credit rating. The cost of insuring against a default of French government debt hit a record.