All three major U.S. stock indexes closed down Thursday, falling about 2 percent as investors fled the market on fears of slowing global growth and rumors of a downgrade of all banks by Moody's. In international news, a report released Thursday showed that Chinese manufacturing fell to a seven-month low, according to a preliminary reading of the HSBC Manufacturing Purchasing Managers' Index. Eurozone finance ministers have gathered in Luxembourg for a two-day summit. The leaders have been facing pressure to announce new measures to combat the sovereign debt crisis. Spain's bond auction of 2-, 3-, and 5-year bonds Thursday resulted in 2-year yields doubling from the prior auction, sending yields for the 5- and 7-year notes also markedly higher. However, the yield on the 10-year Spanish bond fell to 6.5 percent. In U.S. news, the Labor Department reported that there were 387,000 first-time filings for unemployment benefits in the week ended June 16, which was little changed from the prior week but slightly above analysts' forecast of 380,000. Existing home sales for May came in slightly below expectations at an annualized rate of 4.55 million, according to the National Association of Realtors. The Conference Board's Leading Economic Indicators index for May came in higher than expected, increasing 0.3 percent. The dollar rose against the euro and the yen, but fell versus the pound. Light sweet crude oil for July delivery dropped $3.25 to $78.20 a barrel on the New York Mercantile Exchange, falling below $80 for the first time since October. Gold futures lost $50.30 to $1,565.50 an ounce. The Dow Jones industrial average fell 250.82, or 1.96 percent, to 12,573.57. Commodity-related stocks suffered the worst, with shares of Exxon Mobil, Chevron, and Alcoa among the biggest decliners on the Dow. The broader Standard & Poor's 500 index dropped 30.18, or 2.23 percent, to 1,325.51. The technology-heavy Nasdaq composite index lost 71.36, or 2.44 percent, to 2,859.09.
