The U.S. stock market plunged on Monday after a disappointing Chinese GDP report sparked fears about slowing global growth.
The fear was evident across asset classes, but the biggest story of the day was a better than 10 percent decline in gold prices -- the worst day for the precious metal since the 1980s. Silver was also hit very hard on the session as heavy selling pushed prices below $23.00.
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Both the S&P 500 and Nasdaq recorded losses of better than 2 percent on the day while the Dow was down a little less than 2 percent. The losses across markets also triggered an extreme move in the VIX, with the fear gauged jumping more than 40 percent.
The Dow Jones Industrial Average lost 267 points, or 1.79 percent, to 14,599.
The S&P 500 fell more than 36 points, or 2.30 percent, to 1,552.
The Nasdaq Composite registered a loss of 73 points, or 2.38 percent, to close at 3,216.
One of the primary catalysts for the sell-off in risk assets on Monday was a Chinese GDP report which showed that the economy grew 7.7 percent in the first-quarter, which was less than the 8 percent that economists had been expecting.
The disappointing figure reverberated across global markets as investors fretted that a slowing Chinese economy will weigh heavily on demand for raw materials and could hurt top-line growth at international corporations with exposure to the country.
Crude oil prices plunged on Monday along with the entire commodity complex and the stock market. Near the close of equities, NYMEX crude futures, the U.S. benchmark, had lost around 3 percent to $88.41. Brent crude was last down a little less than 3 percent to $100.22. Natural gas futures had fallen around 1.70 percent to $4.15 in afternoon trade on Monday.
The severe sell-off that started in precious metals last Friday picked up steam to start the trading week. Monday was one of the ugliest days for gold prices in recent memory as the yellow metal has sunk to a 2-year low. Near the close of equity trading, COMEX gold futures were down roughly 9.30 percent and were trading at $1,351.40. Silver futures had plunged 11.50 percent on the session to $23.07. Copper was last down around 2 percent late on Monday.
The entire grain complex was also lower, but the losses were minor compared to other markets. At last check, corn futures were roughly 2 percent lower while wheat had lost nearly 3 percent. In soft commodities, orange juice concentrate futures were up around 3.50 percent while most other markets were only moderately lower.
The sell-off in risk assets on the day pushed the prices of U.S. Treasuries higher. Near the close, the iShares Barclays 20+ Year Treasury Bond ETF (NYSE:TLT) has rise around 0.85 percent and was trading at $122.95. The rise in prices pushed bond yields lower.
Both the 2-Year Note and 5-Year Note yields shed one basis point apiece to 0.22 percent and 0.68 percent, respectively. The 10-Year Note yield fell three basis points to 1.69 percent while the 30-Year Bond yield lost four basis points to 2.88 percent.
The U.S. dollar was slightly higher on Monday as investors sought liquidity. In late trading, the PowerShares DB US Dollar Index Bullish ETF (NYSE:UUP), which tracks the performance of the greenback versus a basket of foreign currencies, has added 0.22 percent to $22.39.
The closely watched EUR/USD pair was last down around 0.30 percent to $1.3040. The greenback plummeted against the Japanese yen on Monday, reversing recent huge gains for the USD/JPY. Other significant movers included a better than 1 percent pop in the USD/CAD and a sharp 1.70 percent decline in the AUD/USD on plunging risk appetite.
Volatility and Volume
Not surprisingly, the VIX made a massive move on Monday after investors were caught flat-footed on a very bad day for the financial markets. The widely watched barometer of investor fear jumped better than 40 percent on the day to 16.93.
Anxiety was also evident in higher trading volumes to start the week. Around 192 million SPDR S&P 500 ETF (NYSE:SPY) shares were traded on the day compared to a 3-month daily average of around 124 million.
Theravance (NASDAQ:THRX) was up around 21 percent heading into the closing bell after reviewers at the FDA said that data for the company's COPD treatment Breo appeared to be supportive for reducing COPD symptoms.
Spring Nextel (NYSE:S) climbed roughly 14 percent on Monday after the company received a $25.5 billion buyout offer from Dish Network (NASDAQ:DIAH).
Acorda Therapeutics (NASDAQ:ACOR) jumped better than 12 percent after the company announced that Phase II data for AMPYRA Extended Release Tablets improved walking in people with post-stroke difficulties.
Life Technologies (NASDAQ:LIFE) closed up around 7.50 percent after the company agreed to be acquired by Thermo-Fisher (NYSE:TMO) for $13.6 billion.
The day's biggest losers were primarily in the basic materials sector after commodities, particularly gold and silver, experience a massive sell-off.
Halcon Resources (NYSE:HK), an independent energy company, fell almost 16 percent on the session.
New Gold (NYSE:NGD) posted a loss of almost 15 percent on the back of the steep plunge in gold prices.
Barrick Gold (NYSE:ABX), a leading gold miner, lost better than 12 percent on Monday.
Tahoe Resources (NYSE:TAHO) lost 15 percent amid the sell-off in commodities. The company is a precious metals miner based in Reno, Nevada.
Walter Energy (NYSE:WLT) continued its steep decline, registering a loss of better than 14 percent on the day.
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