Wall Street suffered its second big drop in a week Wednesday, with investors worried about spreading fallout from the credit crisis at banks and about a dollar that just keeps getting weaker. The Dow Jones industrial average fell more than 360 points — just about matching its plunge of last Thursday.
A passel of worries tormented investors, including the dollar, which swooned amid speculation that China will seek to diversify some of its foreign currency stockpiles beyond the greenback. Meanwhile, a record loss from General Motors Corp. owing to an accounting adjustment further dragged on sentiment.
Oil traded above $98 per barrel for the first time before retreating, and gold pushed higher, moves exacerbated by an anemic dollar.
The 13-nation euro hit a fresh record against the dollar – rising to $1.4729 – before falling back. The dollar fell not only against the euro but in Asia following a report that a senior Chinese political figure said China should diversify its $1.43 trillion foreign exchange reserves into the euro and other strong currencies.
The euro's rally put it well above the $1.4554 the currency bought late Tuesday in New York. The previous record high, also set Tuesday, was $1.4571.
Financial stocks, battered in recent sessions by big write-downs by names like Citigroup Inc., fell again Wednesday amid fresh concerns about the extent to which bad debt tied to a faltering housing market will hurt balance sheets.
In late afternoon trading, the Dow fell 360.92, or 2.64 percent, to 13,300.02. The Dow, which had gained 117 points on Tuesday, had fallen 362.14 last Thursday, reflecting the extreme fractiousness on Wall Street these days.
Broader stock indicators also pulled back Wednesday. The Standard & Poor's 500 index fell 44.62, or 2.94 percent, to 1,475.65 – moving below the psychological benchmark of 1,500. The Nasdaq composite index fell 76.42, or 2.70 percent, to 2,748.76.