Dow Jones: 11,391.48 (–504.96) Nasdaq: 2,557.26 (–135.81) SP 500: 1,200.02 (–60.32)

US STOCKS plunged yesterday, driving the Standard and Poor’s 500 to the biggest decline since February 2009, as concern that the global economy is weakening prompted a global rout.

Only three out of 500 stocks in the benchmark measure of American equities rose. Losses exceeded 10 per cent for 13 of the companies including Alpha Natural Resources and Gap, which fell after the retailer’s sales missed estimates.

All 10 SP 500 groups slumped, led by losses topping 5.3 per cent for material, energy and industrial shares.

Among stocks hitting new 52-week lows were Bank of America, down 7.4 per cent at $8.83.

Citigroup slumped 6.6 per cent at $34.81.

Hewlett-Packard retreated 5.1 per cent at $32.54.

Chevron and Alcoa fell more than 5.7 per cent as Japan sold its currency, driving down commodities priced in the dollar.

“People are throwing in the towel because they can’t find relief on any front,” said Milton Ezrati, market strategist at Lord Abbett in Jersey City, New Jersey.

The SP 500 fell 4.8 per cent to an eight-month low of 1,200.02 in New York. It has retreated 11 per cent since July 22nd, the biggest loss over the same amount of time since March 9th, 2009, when the bull market began.

“It’s unbelievable,” David Joy, a Boston-based chief market strategist at Ameriprise Financial, said.

“The emotional aspect of this is ticking higher. It’s left everybody with this mindset that things are not good. The situation in Europe is getting everyone concerned. We had the impact of the Japan intervention in the currency market. The flight to quality trade is going to pick up,” he said.

The Dow Jones Industrial Average retreated 504.96 points, or 4.3 per cent, to 11,391.48, erasing its 2011 gain.

US crude futures settled down $5.30 to $86.63 a barrel in New York.

"The debt troubles in Europe, especially with the yields on Italian and Spanish government bonds soaring, are making investors gather as much liquidity as possible," said Stephen Massocca, managing director of Wedbush Morgan in San Francisco . – (Bloomberg/Reuters)