NEW YORK – A drop in the euro set off a late-day slide in stocks Wednesday and sent the Dow Jones industrial average to its first close below 10,000 in nearly four months.
The Dow, up 135 points in morning trading, ended down about 69. It was the eighth drop for the Dow in 10 days. Wednesday’s trading extended a streak of volatility since stocks went to their highest level of the year in late April.
The late reversal underscored how jittery traders are about Europe. They are worried that heavy debt loads in European countries and more rounds of cost-cutting will hamper a recovery there, which could spread quickly to other regions.
“We had a nice rally all day and we expected it to have had legs,” said Phillip Orlando, chief equity market strategist at Federated investors in New York, which manages about $400 billion. The sudden sell-off, he said, suggests “that investors are as nervous as a long-tailed cat in a roomful of rocking chairs.”
The euro fell in late trading, pulling major stock indexes lower, following a Financial Times report that China is reviewing its holdings of European government bonds because of the crisis in government debt there.