Stocks Extend Plunge

By CHRIS DIETERICH

Stocks extended steep losses as anxiety mounted over the potential for the Federal Reserve to pull back its stimulus efforts.

The selloff rattled across markets, with gold dropping and yields on Treasury bonds marching to two-year highs.

The Dow Jones Industrial Average shed 360 points, or 2.4%, to 14750, on pace for its biggest percentage decline of the year. The Standard & Poor's 500-stock index lost 39 points, or 2.4%, to 1589. The Nasdaq Composite Index fell 78 points, or 2.3%, to 3364.

Traders said the selling Thursday was being led by short-term investors such as hedge funds and accelerated when the S&P 500 broke through 1600.

Stocks began their decline at the opening bell, extending losses first kicked off after Fed Chairman Ben Bernanke reiterated Wednesday that the central bank could start winding down its $85-billion-a-month asset-purchase program later this year.

Despite the upbeat view for the economy, the prospect of curtailing the bond-buying efforts that have helped the Dow and S&P 500 hit records this year sent jitters through the market. The yield on the 10-year Treasury note, which moves inversely to its price, reached 2.419%, its highest since August 2011.

Gold has been hit particularly hard, as its appeal as a hedge against inflation and currency weakness faded. Gold slid 6.4%, to settle at $1,285.90 a troy ounce, dipping below $1,300 for the first time since September 2010.