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Stocks plunged to their worst one-day performance since 2001, with the Dow Jones Industrial Average losing 200 points in one minute around 3 p.m. before recovering some ground by the close, after a sell-off in China fueled concerns about growth. Stocks tumbled across the board, after declining global markets and a steep drop in durable goods orders triggered a massive sell-off on Wall Street. Trying to limit the declines, the NYSE said it imposed trading curbs as of 1:03 p.m. ET, around the time the Dow slipped 200 points.

Today, the Dow Jones industrial average closed down 416.02 or 3.29% to 12,216.24, its biggest one-day point loss since the day the stock market reopened after the Sept. 11th attacks. The blue-chip barometer has now fallen for five sessions straight. The broader S&P 500 closed down 50.33 or 3.47% to 1,399.04, and saw its biggest one-day percentage loss in nearly four years. The S&P 500 also slumped for the previous four sessions. The Nasdaq closed down 96.65 or 3.86% to 2,407.87, its biggest one-day percentage loss since Dec. 9, 2002.

Market breadth was negative On the New York Stock Exchange, decliners trounced advancers by almost 29 to 4 on volume of 2.31 billion shares. On the Nasdaq, losers beat winners by more than 14 to 1 on volume of 3.05 billion shares. Global mayhem started with the Chinese stocks slipping 9% - the worst one-day sell-off in a decade - on concerns that the government would interfere to cool the speculation that drove the Shanghai market up nearly 130% last year. Other Asian markets slumped in tandem, and European shares followed.

The sell-off demonstrates the inter-connectedness of stock markets around the world. The slump in world markets exacerbated concerns that Wall Street is due for a sell-off after a nearly eight-month rally that has sent the Dow industrials to record highs and the Nasdaq and S&P 500 to more than 6-year highs. Market veterans have been looking for a stock sell-off for some months due to the combination of slowing economic and earnings growth expected this year.

Amongst economic news, the existing home sales grew at a faster-than- expected pace in January, and the consumer confidence saw a surprise rise in February versus forecasts for a drop. Orders for durable goods sank a much sharper-than-expected 7.8% in January as non- defense goods orders saw their biggest monthly decline ever. Economists had forecast that orders for durable goods would fall 2.5%.

Stock of Wal-Mart Stores Inc. fell 3.6% after it agreed to acquire 35% of Trust-Mart, a Taiwanese-owned operator of hypermarkets in China. The world’s largest retailer has reportedly agreed to pay around $1 billion for the stake. Taking full control of Trust-Mart would more than double Wal-Mart’s retail footprint in China, where it currently operates 68 Super-centers, three Sam’s Clubs, and two Neighborhood Markets in 36 cities.

Stock of Apple Computers closed at $88.65, after declining that its Apple TV will be delayed until mid-March. A company spokeswoman said that Apple Inc. will delay until mid-March its Apple TV device for playing computer-based video on television sets. Apple, in early January said it would launch in February the $299 Apple TV, which wirelessly links computers to televisions.

U.S. light crude oil for April delivery rose 41 cents to $61.80 a barrel on the New York Mercantile Exchange. The price of oil rose for the last four sessions.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter
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