Stocks drop in afternoon trading; gold plunges

NEW YORK (AP) ? A steep fall in commodity prices pulled down energy and mining stocks for a second day on Monday. The Dow Jones industrial average dropped more than 200 points, putting it on course for its worst loss since February.

Gold plunged below $1,400 an ounce for the first time in two years as a sell-off in metals continued from last week. Oil prices hit their lowest level since mid-December.

"I think you're getting some panic selling right now" in the gold market, said Frank Fantozzi, CEO of Planned Financial Services, a wealth management firm.

The Dow was down 207 points at 14,658 as of 3:14 p.m., a drop of 1.4 percent. Caterpillar, which makes heavy equipment used by miners, led the Dow lower with a drop of 3 percent to $82.67.

A report that China's economy unexpectedly slowed pummeled copper and other commodities. The world's second-largest economy expanded by 7.7 percent in the first three months of the year, well below forecasts of 8 percent or better.

Gold prices dropped $140 to $1,361 an ounce, a 9 percent fall. It has fallen $203 an ounce over the past two days. Crude oil slid $2.58 to $88.71 in New York trading.

The plunge in commodity prices hit mining and energy stocks. Cliffs Natural Resources lost 8 percent to $17.65. Freeport-McMoRan Copper & Gold fell 8 percent to $29.52. Analysts at Citigroup placed a "sell" rating on the mining giant on the expectation that copper prices will continue sliding.

In other trading, the Standard & Poor's 500 index slumped 26 points to 1,562, a loss of 1.7 percent. Of the 10 industry groups in the S&P 500, materials and energy stocks fared the worst, sliding 3 percent.

The Nasdaq composite fell 67 points, or 2.1 percent, to 3,227.

Among rising stocks, Citigroup rose 2 percent to $45.87, one of the best gains in the S&P 500. The country's third-largest bank reported earnings that beat analysts' estimates thanks to stronger revenue from trading and investment banking.

Sprint Nextel jumped after Dish Network offered $25 billion to buy the company. Dish's bid is aimed at beating an offer from the Japanese phone company SoftBank. Sprint surged 13 percent to $7.01, while Dish fell 6 percent to $35.41.

Thermo Fisher Scientific offered to pay $13.6 billion to buy genetic testing equipment maker Life Technologies. Thermo Fisher agreed to pay $76 in cash for each share of Life Technologies. Life Technologies rose 7 percent $73.05.

In the market for U.S. government bonds, the yield on the 10-year Treasury note dipped to 1.70 percent from 1.72 late Friday. The yield remains near its low point of the year, 1.69 percent, reached April 5 following news that U.S. employers hired far fewer workers than expected last month.

Source: http://news.yahoo.com/stocks-drop-afternoon-trading-gold-plunges-165407893--finance.html

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