For investors, it is on Thursday, no place to go.
A day later, the Fed disrupt Wall Street, it says, which may reduce its positive economic stimulus plan later this year, the world's financial markets plummeted. In the world's second largest economy, credit crunch slowing Chinese manufacturing and reporting concerns intensified.
Global sell-off began in Asia and quickly spread to Europe and the United States, where the Dow Jones Industrial Average fell 353 points, wiping the six weeks of gains.
But the damage is not just stocks. Bond prices fell, the benchmark 10-year bond yield rose to 2.42% for August 2011, the highest level since, but still at historically low levels. Oil and gold prices fell.
Banyan Partners chief market strategist Robert - Pavlik (Robert Pavlik) said, "People worry about higher interest rates." "High interest rates have the ability to cut across all sectors of the economy."
The question now is whether in Thursday's move is a market overreaction or a sign of a more volatile. Increasingly clear that traders and investors are looking for low interest rates for some time, a new equilibrium, because the Fed's bond purchases, which helped spawn one of the great bull market of all time.
This does not mean stock run ends. After all, the S & P 500 index is still up by 11.4 percent this year and 135% lower than in March 2009 since the recession. However, it may imply the stock market more closely tied to the fate of the economic fundamentals of a new stage begins.
That might not be a bad thing. Fed to buy back bonds because of its economic forecast is getting brighter.
The job market is improving, the company is record profits, the housing market is recovering.
"People are overreacting a little, said:" Gene Goldman CETERA Financial Group, Head of Research. "Back to fundamentals, the economy is improving."
The Dow fell Thursday - knock average fell 2.3 percent to 14,758.32 - the largest since November 2011. Just three weeks after the blue-chip index reached a record high 15,409. In the past two days, the index has dropped 560 points, wiping it from the May and June earnings
Standard & Poor's 500 index fell 40.74 points, or 2.5 percent, to 1,588.19. It also reached a record high last month, with a peak at 1,669. The Nasdaq composite index fell 78.57 points to 3,364.63 points, or 2.3%.
Small company's stock fell more than the rest of the market Thursday, a sign that investors are actively reduce risk. The Russell 2000 index, which includes such stocks, fell 25.98 points, or 2.6 percent, to 960.52. The index closed at 999.99 points, a record high on Tuesday.
10-year bond yield rose to 2.42 percent, 2.35 percent, Wednesday. Yield, which rises as the price falls sharply rising note 0.16 percent on Wednesday after the Federal Reserve's remarks. Recently as May 3, was 1.63%.
Fed policy statement and Chairman Bernanke comments Wednesday began selling stocks and bonds.
Bernanke said the Fed is expected to reduce its massive bond-buying program later this year and completely finished by mid-2014 if the economy continues to improve.
The bank has been buying government bonds and mortgage bonds, borrowing cheaper for consumers and business processes, and achieved $ 8.5 billion a month. It also helps boost the stock market.
S & P Capital IQ's global equity strategist Alec Young said that investors expect Bernanke said the project will end so soon, and adjust their portfolios, expected higher U.S. interest rates.
Young said: "What we see is a very significant investment strategy changes,"
For most of the year, the stock market rose almost without interruption. S & P 500 index rose for seven consecutive months, from November 2012 to May. Investors worried about missing the rally any pounced down and push the market highs. On Thursday, those opportunistic buyers absent. No one wants to stand in the way the market slide.
As investors sell stocks, they may put cash, "the fear will continue to deteriorate," said Quincy Krosby, market strategist at Prudential.
Bond yields increased dramatically, prompting investors to sell home builders, its business may be harmed if the pace slows down to buy a home. These stocks fell on Thursday, despite the National Association of Realtors said that previously occupied homes sold in the U.S. last month at an annual rate of three and a half since the first time exceeded 50,000.
PulteGroup fell $ 1.89, or 9.1 percent, to $ 18.87. DR Horton fell $ 2.13, also 9.1 percent, to $ 21.31.
Markets were also uneasy manufactured in China at a faster pace slowed, demand weakened this month. This is the world's second largest economy growth concerns. Monthly HSBC purchasing managers' index fell to 48.3 in June, the nine-month lows. Figure below 50 indicates contraction.
Overnight lending rate in China is a major leap uneasy investors, financial advisers Brad Reynolds, in LJPR said. Rate measures how much banks charge each other to borrow short-term money. People's Bank of China, China was forced to pump about 5 billion yuan, or about $ 80 billion into China's financial system to ease squeeze, Bloomberg News reported.
Before trading begins on Thursday on Wall Street, Japan's Nikkei index fell 1.7%. Leading British shares FTSE 100 index fell 3%, while Germany's DAX index fell 3.3%.
In currency trading, the dollar rose to 97.34 yen from 96.54 yen. The euro fell against the dollar, $ 1.3197 from $ 1.3274.
Gold commodity prices plummeted, resulting in defeat. Gold fell $ 87.80, or 6.4 percent, to $ 1,286.20 dollars. Silver fell $ 1.80, or 8.3 percent, to $ 19.823 an ounce. Both are in September 2010, the lowest level since.
Traders to sell gold and silver as they appeal the insurance against inflation and a weak dollar fade. Have become a problem, the Fed said it was considering ending its bond-buying program.
Oil is swept up in the sell-off. Crude oil prices since January largest single-day decline. U.S. benchmark crude for July delivery sank $ 2.84, or 2.9 percent, to close at $ 95.40 a barrel in New York. Gasoline futures prices fell more than 3%.
Some investors said the sell stocks may be exaggerated. The Fed is considering in its stimulus to fall, because the economy is improving. The central bank has upgraded its unemployment and economic growth prospects.
S & P 500 is still up 11.3% for the year, not far away from its last year's growth of 13.4%.
Other stocks big move:
- Sales of new and used games, GameStop's video game stores, rose $ 2.41, or 6.3 percent, to $ 40.94 Microsoft said after the setback, sharing its upcoming Xbox game consoles have any restrictions.
- Rite Aid Corporation fell 23 cents, or 7.4 percent, after the nation's third-largest drugstore chain, cut its 2014 earnings forecast to $ 2.88
 
 



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