NEW YORK - Stocks plunged Tuesday and bond prices rose as the nuclear crisis in Japan intensified following a deadly earthquake and tsunami. The Dow Jones industrial average fell more than 150 points.
The market dropped sharply at the start of trading on news that dangerous levels of radiation are leaking from a crippled nuclear plant. Investors are selling because of uncertainty about the impact the nuclear crisis might have not only on Japan, but also on companies in this country. Japan, the world's third-largest economy, accounts for 10 percent of U.S. exports.
Intel Corp., National Semiconductor Corp. and other chip makers were among the biggest losers. Many technology companies are dependent on Japanese factories for their products or components. Insurance companies that do business in Japan, like Aflac Inc., also fell sharply.
Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners, said fear had taken hold in the market.
"It's a situation where you sell, and you ask questions later," he said.
After initially falling as much as 297 points, the Dow backtracked and was down 168 points, or 1.4 percent, at 11,825 in early afternoon trading. All 30 of the stocks in the Dow average were down.
The Standard & Poor's 500 index fell 17 points, or 1.4 percent, to 1,278. The Nasdaq composite index fell 37, or 1.4 percent, to 2,664.
Only 356 stocks rose on the New York Stock Exchange, while 2,621 fell.
All 10 company groups in the S&P fell. Technology stocks fared the worst, falling 2.4 percent. Power outages have made it nearly impossible for Japanese factories to produce semiconductors and other electronics, said Kim Caughey Forrest, equity research analyst at Fort Pitt Capital Group.
Intel fell 3.1 percent, the most of any stock in the Dow average. Jabil Circuit Inc., which makes parts for electronics and other technology companies, fell 3 percent.
Energy stocks also fell as the price of oil dropped below $100 a barrel. Crude was down $2.04 at $99.15 a barrel as analysts anticipated lower demand because of the earthquake. Exxon Mobil Corp. and Chevron Corp. were each down about 1 percent.
Among insurers, Aflac was down 8 percent. The health and life insurance company does about 75 percent of its business in Japan, but said it was well prepared to handle claims in the country. Hartford Financial Services Group Inc., which also has operations in Japan, fell 5 percent.
Stocks have been fluctuating sharply since the quake on Thursday. The Dow fell 228 points Thursday, and came back 59 Friday. The market has a long history of bouncing back after a big drop. But an extended period of volatility is likely until the situation in Japan becomes clear.
Investors sought the relative safety of U.S. Treasurys, sending prices higher and yields lower. The yield on the 10-year Treasury note dropped to 3.23 percent from 3.36 percent late Monday. Treasury prices soared during stocks' long drop during the financial crisis. They have fallen as stocks recovered, but events like the Japanese quake and tsunami send investors in search of safer places to put their cash.
The Federal Reserve was holding a regularly scheduled meeting Tuesday. Little change in monetary policy was expected from the meeting. However, investors wanted to know if the Fed forecast any damage to the economy from the disaster in Japan. The Fed was scheduled to issue a statement on the economy at 2:15 p.m. Eastern time.
(Copyright 2011 by The Associated Press. All Rights Reserved.)