Stocks began the day sharply lower and extended their losses in midday trading Wednesday as investors resumed selling stocks and buying safe bets such gold and Treasuries.
The blue-chip Dow Jones industrial average was down about 427 points, or 3.8 percent, in mid-morning trading, putting it back below the 11,000 threshold it had managed to break through yesterday.
The Standard & Poor’s 500-stock index, a broader market measure, was down 44 points, or 3.7 percent, while the Nasdaq, a more tech-heavy index, was down 85 points, or about 3.4 percent.
U.S. stocks finished Tuesday up sharply after a last-minute rally helped each index end the day up more than 4 percent, paring back some of Monday’s historic losses. The rally wiped out losses from earlier in the day when the Federal Reserve published its latest policymaking statement, which forecast slow economic growth and pledged to keep interest rates near zero through mid-2013.
But Wednesday investors resumed their initial reaction to the Fed’s decision, selling stocks and piling into safe bets such as gold and Treasuries. Gold futures were up 2 percent to $1,775 per troy ounce, after ending yesterday at a record close of $1,740. The yield on the 10-year Treasury also continued to push further into record territory, falling to 2.16 percent in mid-morning trading, a new low for the year. It had closed at 2.25 percent on Tuesday and had started the year at more than 3.3 percent. A lower yield means investors are willing to accept a smaller return on their investment in exchange for the safety of holding government debt.
Oil, which shed $3 after the Fed’s decision Tuesday, resumed its climb. Oil futures were up $0.82 to $80.12 per barrel in mid-morning trading Wednesday.