Spurred by ongoing fears about a global economic slowdown and the spreading European debt contagion, the Dow Jones Industrial Average replayed the daytime drama previously seen last week by plunging by over 400 points. As before, the nosedive crashed a party exclusive to mortgage banks and homebuilding companies, gutting their stocks and closing shares at new lows.
[IMAGE]According to ""CNNMoney"":http://money.cnn.com/2011/08/18/markets/markets_newyork/index.htm?hpt=hp_t1, a ""National Association of Realtors"":http://www.realtor.org/ study showing existing-home sales drop-off by 3.5 percent conspired with a gloomy ""Morgan Stanley"":http://www.morganstanley.com/ report to lead the trading purge late Thursday.
Declining confidence in the ability of euro zone markets to recover from sluggish growth and fend off defaults ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô and downgrades ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô crunched Wall Street.
[COLUMN_BREAK]The news outlet quoted Morgan Stanley as calling markets in the U.S. and Europe ""dangerously close to recession.""
""The fact that Morgan Stanley has downgraded its global growth forecast really highlights the concerns and problems facing the global economy,"" CNNMoney quoted Michael Hewson, a market analyst with CMC Markets, as saying.
""It begs investors to question where future growth will come from,"" he said.
The Dow tipped over on mortgage giants ""Bank of America"":https://www.bankofamerica.com/, ""JPMorgan Chase"":http://www.jpmorganchase.com/corporate/Home/home.htm, and ""Wells Fargo"":https://www.wellsfargo.com/. Bank of America stocks fell by 6 percent, clipping shares at $7.01 Thursday. JPMorgan Chase dipped by 3.77 percent, closing each of the bank's shares at $35.19 by end of day. Wells Fargo followed with stocks that fell by 4.66 percent and shares that closed at $23.72 each.
Major homebuilding companies similarly witnessed a squeeze in their respective stocks and shares. ""Beazer Homes USA's"":http://www.beazer.com/ stocks dropped by 12.71 percent, with shares each tying off at $1.58, while ""D.R. Horton"":http://www.drhorton.com/ saw its stocks plummet by 6.26 percent, closing shares at $9.13 each. Meanwhile, ""KBH Homes'"":http://www.kbhhomes.com/ stocks fell with the Dow by 10.45 percent, shaving off shares at a complete $6.00 by end of day. Of these companies, ""Lennar Corp."":http://www.lennar.com/ seemed to fare slightly better, seeing its stocks drop by 7.64 percent and its shares close at $13.30 each.
The CBOE Volatility Index, which measures investor fears and market worries, went skyward by a whopping 35.12 percent at end of day.