Nose Dive: Dow plunges 500 points losing everything it gained in 2011
August 5, 2011 at 12:33 AM EST - Updated June 24 at 11:37 PM
Financial markets around the world are bracing for what could be another wild ride.
Thursday, the Dow Jones industrial average nose-dived more than 500 points wiping out everything it had gained in 2011.
Investors led the biggest selloff on Wall Street since the financial crisis of 2008.
Traders blame high unemployment, a sluggish economy and growing fear of another recession.
"The combination of everything is frightening. There's a psychological component that's going to be hard to shake," said NYSE Trader Doreen Mogavero.
Fear could spread further when the Labor Department releases its monthly job report Friday. The last two reports have seen the nation's unemployment numbers rise to 9.2 percent.
"Traders HAD hoped Wall Street would be more upbeat once Washington agreed to raise the debt ceiling. But stocks have dropped for nine of the past 10 trading sessions," said Reporter Alexis Christoforous.
Americans are feeling it. In a recent CBS News – New York Times poll, 86 percent say the economy is in bad shape.
"These are big issues and our work is not done. We need to continue to focus on what we can do to ensure that our economy grows and creates jobs," said White House Press Secretary Jay Carney.
Add to that European stocks have continued to slide over concerns that Italy and Spain may need bailouts from the European union.
"And with the economies of world not in robust recovery at the moment, the worry is that a slowdown in Europe drags entire globe down again. And that's why you're seeing pressure on stocks across the globe," said Chief Investment Strategist PNC Bill Stone.
The European Union has already given financial assistance to Greece and Ireland and any more rescue packages might be more than the group of countries can handle.