Stocks skid on renewed fears of global slowdown

NEW YORK — No matter where they look, investors are seeing economic trouble.

Stocks and interest rates tumbled Tuesday after signs of slowing economies from China to the U.S. spooked traders who were already uneasy about a global recovery.

The Dow Jones industrial average fell 268 points, or 2.7 percent, and dropped below 10,000. The benchmark Standard & Poor's 500 index closed at its lowest level since October.

Interest rates fell in the Treasury market after demand for the safety of government debt grew. The yield on the 10-year note dropped to as low as 2.96 percent, the first time it has fallen below 3 percent since April 2009. The yield is used as a benchmark for many consumer loans and mortgages.

The markets began the day by following Asian and European markets lower. Asian stocks fell after an index that forecasts economic activity for China was revised lower. European indexes continued the slide after Greek workers walked off the job to protest steep budget cuts.

Then, shortly after U.S. trading began, the market was hit with news that consumer confidence fell sharply this month because of worries about jobs and the overall economy. The Conference Board's Consumer Confidence Index fell to 52.9 from a revised 62.7 in May. It was the steepest drop since February and economists polled by Thomson Reuters had forecast only a modest dip.

Companies have indicated that business is getting better, yet there are few signs they are ready to hire in big numbers. The Labor Department's monthly employment report due Friday is expected to show the unemployment rate rose 0.1 percentage point to 9.8 percent in June.

Industrial stocks suffered some of the steepest drops on fears that a stalled global rebound will cut demand. Aircraft maker Boeing Co. led the Dow lower with a drop of 6.3 percent. Caterpillar Inc., the maker of construction and mining equipment, lost 5.5 percent. Shares of coal producers pulled energy stocks lower on worries about a slowdown.

Investors have been so burned by the financial crisis of 2008-09 that they fear any hint of a slowdown means the economy will start tanking again. And they're selling heavily at the end of the day, fearful about negative economic news that could start coming out of Asia just hours after U.S. trading ends.