JUST FOR LAUGH

Global Growth at Risk

U.S. stocks were thrashed Thursday, with the major indexes taking their hardest single-day hit in five weeks, amid widespread selling of stocks and commodities on escalated fears about the global economy.

After falling almost 528 points during the session, the Dow Jones Industrial Average DJIA -3.51%  finished with a drop of 391.01 points, or 3.5%, at 10,733.83.

The battering left the Dow nearly 14 points above its lowest close for the year and represented its steepest drop since Aug. 18.

All 30 of the blue-chip index’s components lost ground, with United Technologies Corp. UTX +0.16%  hardest hit, its shares tumbling 8.8%.

The negative sentiment taking hold among investors is “driven by the bank runs in Europe, and some of the European banks are rumored to be looking in the Middle East for capital; it’s like a replay of 2008 for some of the U.S. banks,” said Charlie Smith, chief investment officer at Fort Pitt Capital.

“When you talk about bank recapitalizing and going to places like Dubai to do it, everything echoes back to 2008 except economic fundamentals,” said Lazard’s Hogan.

U.S. stocks were part of a global stock selloff as investors also reacted to the Federal Reserve’s statement late Wednesday. The central bank warned of risks to the economic outlook and unveiled a bond-swap program, seen as something that would have minimal sway in revitalizing growth.

“The Fed cannot engender growth; the Fed cannot engender risk-taking. What it can do is buffer declines, but let’s see a real decline,” said Smith at Fort Pitt Capital, pointing out that the S&P 500 is down 5.8% for the year to date, on a total return basis. “Let’s talk when we make it 18% or 20%. The Fed is going to hold their fire until they see the whites of people’s panicked eyes.” 

Credit -marketwatch

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