The Dow Jones Industrial Average plunged 268 points, or 2.6%, to 10,002. The S&P 500 lost 34 points, or 3.1%, to 1063 and the Nasdaq stumbled by 65 points, or 3%, at 2125.
The blue-chip average experienced its biggest one-day point drop since last April and hit an intraday low just under 10,000 a few seconds before the close.
Fears about how struggling Portugal, Spain and several Eastern European countries will cover deficits weighed on global markets, lifting the U.S. dollar, which strengthened against a basket of currencies. The dollar index rose 0.6%.>>Five Mid-Cap Stocks Ready to Break Out Prices on commodities and related stocks nose-dived as a stronger greenback on sovereign debt fears diminished the appeal of dollar-priced assets to foreign buyers. The most actively traded April gold contract shed $49 to settle at $1,063 an ounce. Crude oil for March delivery settled at $73.14 a barrel, plunging $3.84 a day after EIA inventory data surprised with both a build of 2.3 million barrels in crude oil when a million-barrel decline was expected and a steeper-than-expected drop in gasoline stocks, which shed 1.3 million barrels. The March natural gas contract shed a fraction of a penny to $5.42 per million British thermal units after the Energy Information Administration reported a storage withdrawal of 115 billion cubic feet for the week ended Jan. 29. Analysts polled by Platts had been expecting a withdrawal in the range of 121 billion to 125 billion cubic feet. Prices on U.S. Treasuries lifted across the maturity spectrum as investors sought safety from riskier assets. The short-dated two-year note strengthened 5/32, weakening yields to 0.804%, and the benchmark 10-year note gained 27/32, lowering the yield to 3.602%. The 30-year bond rose 1 16/32, diluting the yield to 4.544%.