U.S. stocks caved as Wall Street joined global markets in a collective rush from risk assets in the wake of Britain's vote to depart the European Union.
"Europe is an important economic center. Europe matters quite a bit to the global economic picture," Jim Russell, a principal and portfolio manager at Bahl & Gaynor, told CBS MoneyWatch. "The uncertainty is what the markets are going to react to over the next few trading days."
Reactions to the unexpected result ranged from predictions that the move assures a recession is coming to the U.K. to projections that the fallout to the U.S. would be limited.
The British pound fell to its lowest level in more than three decades and European bank stocks tallied their sharpest declines ever. European equities readied for their worst session since 2008 and gold rallied the most since the financial crisis.
In a statement, the Federal Reserve said it was "carefully monitoring developments in global financial markets, in cooperation with other central banks," after the referendum results. The central bank stands ready to inject "dollar liquidity through its existing swap lines with central banks, as necessary, to address pressures in global funding markets, which could have adverse implications for the U.S. economy."
At 9:50 a.m. Eastern, the Dow industrials (I:DJI) were off 450 points, or 2.5 percent, at 17,562, with banks leading blue-chip losses that extended to all 30 components.
Goldman Sachs Group (GS) fell 5.7 percent and JPMorgan Chase (JPM) shed 4.7 percent.
JPMorgan and HSBC Holdings said the U.K. vote to succeed from the EU could led to them transferring thousands of jobs from London.
A day after coming within 1 percent of its record high, the S&P 500 (SPX) dropped 57 points, or 2.7 percent, to 2,056. The Nasdaq Composite (comp) fell 150 points, or 3.1 percent, to 4,760.
U.S. economic data brought bad news for American manufacturers, with orders to U.S. factories for long-lasting goods fell 2.2 percent in May after two months of gains.
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