Dow Jones index plunges over 250 points at open

NEW YORK - The Dow Jones Industrial Average fell heavily Tuesday, dropping 250 points or around 2.5 percent just minutes after the opening bell.


Concerns about the health of the eurozone and tensions between North Korea and South Korea sent investors fleeing from the stock market into safe-haven investments such as US government bonds.

By 1340 GMT, ten minutes after the open, the Dow was down 253.55 points (2.52 percent) to 9,813.02, smashing the symbolic 10,000 point barrier.

Similar hits were seen in the tech-rich Nasdaq index, which lost 61.22 points, or 2.7 percent to 2,152.33.

The broad-based S&P 500 was down 28.31 points, or 2.64 percent to 1,045.34.

Markets, rocked by fresh turmoil in the Spanish banking sector, were also hit by the prospect of severe austerity measures in the eurozone that could slam the brakes on the fragile global economic recovery.

"There a combination of factors pulling the rug out from under the market," said IG Index analyst David Jones.

"European debt concerns are brought to the fore again as four of Spain's banks have been pushed into a merger by the government in a move to try and strengthen the region's financial institutions.

Concerns that the European debt crisis might spill beyond stock markets -- hitting financial institution and consumer demand -- force a rise in save-haven US bonds.

"Treasuries are solidly higher amid some flight-to-safety buying," said Charles Schwab analysts.

Shares in Caterpillar, normally seen as a bellwether for broader economic health and consumer demand, traded down more than five percent.