Dow off 376 on world economic worries 21/5/10

Stocks took their deepest plunge in more than a year Thursday as fears grew that Europe's debt crisis could spread around the world and undermine the U.S. economic recovery. The possibility has been brewing for weeks, but analysts said some investors are just waking up to it.

The Dow Jones industrial average fell 376 points, its biggest point drop since February 2009. All the major indexes were down well over 3 percent and are now showing losses for 2010. Interest rates fell sharply in the Treasury market as investors once again sought the safety of U.S. government debt.

Dow Jones encountered another single day plunge of -3.6%, the biggest drop since Feb 2009. We expect it will retest the 10,000 level in near term. The outlook is bearish. Please refer to the chart below.