The early dip in the stock market turned into an all-out rout in late-morning trading on Thursday, as investors recoiled from continuing uncertainty over the global economy and the European debt crisis.
This time, Canada's S&P/TSX composite index bore the brunt of the selloff, falling 400 points to a low of 12,407 as investors turned away from commodity producers in particular. The Dow Jones industrial average was recently down 246 points or 2.1 per cent, to 11,650. The broader S&P 500 was down 29 points or 2.3 per cent, to 1,231.
The declines resume a brutal stretch for major North American indexes just a day after a modest rebound had instilled some hope that the worst of the selloff was over.
Even though Wednesday's gains ended a lengthy losing streak for the Dow, investors are facing another troubling statistic: The blue-chip index is a breath away from falling into official correction territory, defined as a drop of 10 per cent or more. In late morning trading, the index was down 9.7 per cent from its high in late April.
The Canadian slump is steeper, at 12.7 per cent.
The declines were broad, affecting all 10 subindexes within the S&P 500 and the TSX composite index. In both cases, energy stocks and materials stocks led the selloff, reflecting ongoing concerns about global consumption.