Doss, of CRPC Ameriprise Financial and a Rome, Ga., city commissioner, echoed the thoughts of many.
“I think we’re in a global mess and I don’t think the debt ceiling compromise helped the markets. I just feel that market place is in a very volatile state,” he said.
Gripped by fear of a new recession, the stock market suffered its worst day Thursday since the financial crisis in the fall of 2008. The Dow Jones industrial average fell more than 500 points, its ninth-steepest decline.
The sell-off wiped out the Dow’s remaining gains for 2011. It put the Dow and broader stock indexes into what investors call a correction — down 10 percent from their highs in the spring.
“We are continuing to be bombarded by worries about the global economy,” said Bill Stone, the chief investment strategist for PNC Financial.
Across the financial markets, the day was reminiscent of the wild swings that defined the financial crisis in September and October three years ago. Gold prices briefly hit a record high. Oil fell even more than stocks — 6 percent, or $5.30 a barrel. And frightened investors were so desperate to get into some government bonds that they were willing accept almost no return on their money.
It was the most alarming day yet in the almost uninterrupted selling that has swept Wall Street for two weeks. The Dow has lost more than 1,300 points, or 10.5 percent. By one broad measure kept by Dow Jones, almost $1.9 trillion in market value has disappeared.
For the day, the Dow closed down 512.76 points, at 11,383.68. It was the steepest decline since Dec. 1, 2008.
Thursday’s decline was the ninth-worst by points for the Dow. In percentage terms, the decline of 4.3 percent does not rank among the worst. On Black Monday in 1987, for example, the Dow fell 22 percent.
Jerry Dempsey, CEO of Dempsey, Lord, Smith LLC, in Rome, said the market may bounce back and forth on the short term, but he said investors need to see the big picture.
“As a long-term investor, you ought to be stepping in and buying in stages, not putting all your money to work at one time, but just go in an maybe put 25 percent of your money to work now and see if it drops a little bit more, then put another 25 in. Over the long term you’ll make money by doing that.”
Two weeks ago, investors appeared worried about the deadlocked negotiations in Washington over raising the ceiling on government debt. As soon as the ceiling was raised, investors focused on the economy, and the selling accelerated.
On Thursday, growing fear about the weakening U.S. economy was joined by concern in Europe that the troubled economies of Italy and Spain might need help from the European Union.
The European Union has already given financial assistance to Greece and Ireland, two countries that have struggled to pay their debts. A financial rescue package for Italy or Spain might be more than the group of countries can handle.
“Of course, what’s going on in Europe is far worse than it is here but that is so contagious so to speak, because we’re all in this thing together and Japan is not doing well,” said Rome’s David Hunter, senior vice president of investments at Wells Fargo Advisors. “Corporate profits for the first part of this year have been excellent. Corporate America is making a lot of money, but real America, there’s just no jobs and that’s the sad thing about it.”
Until a week ago, Wall Street had mostly convinced itself that the U.S. economy would improve in the second half of the year. Gas prices were falling, and Japanese factories were resuming production after disruptions from the March earthquake.
Then one report after another began to show that the economy was much weaker than first thought.
Manufacturing is barely growing.
And the overall economy is expanding at the slowest pace since the end of the Great Recession. It grew at an annual rate of just 0.8 percent for the first six months of this year, raising the risk of another recession.