Metro

Dow dives as di$asters loom

A perfect storm of looming economic disasters sent stock markets into free fall around the world yesterday — with the Dow plunging more than 500 points as shares took their biggest single-day hit since the 2008 financial crisis.

More than $2 trillion in wealth vanished on the two markets where most Americans place their bets — the New York Stock Exchange and Nasdaq.

The debt-ceiling crisis and fears about the state of the global economy took most of the blame, but experts also cited today’s looming jobs report and out-of-control trading by computers.

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The Dow Jones dropped 512.76 points to 11,383.68, down 4.31 percent, in its biggest drop since Oct. 22, 2008. Oil dipped 6 percent, and the yield on the two-year Treasury note hit a record low as panicked investors rushed to put their money in a safe place.

For every stock that saw a gain, some 20 dropped on the NYSE.

The S&P 500 — the benchmark for Wall Street pros and the retirement accounts of ordinary Americans — lost 4.8 percent, totaling tens of billions of dollars and wiping out all of its gains this year.

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Experts pointed their fingers at the debt shenanigans in Washington for weakening confidence in the United States as a whole — from its currency, to its government’s ability to cover its debt, to the strength of its private companies.

The sell-off was also seen as a vote of no confidence in Europe, especially Italy and Spain, which, along with Greece and other nations, could be facing bankruptcy.

Even in Germany and England, which are economically strong, stock indices fell 3.4 percent.

In Asia, late in the trading session, Japan’s Nikkei 225 stock average had dropped 3.7 percent, while Hong Kong’s Hang Seng dipped 4.8 percent. Elsewhere around the world, Australia’s index declined 4.1 percent as India’s slid 2.2 percent.

“When there’s this much bloodshed out there, nothing is impervious to this type of selling, not even gold,” said Matt Zeman, head of trading at Kingsview Financial.

Gold fell .74 percent.

The Vix, a measure of investor fear, shot up 36 percent. It’s already up 92.6 percent for this quarter, which began July 1.

Wall Streeters were furious that Washington’s financial leaders — especially Federal Reserve head Ben Bernanke — failed to calm markets by offering a plan for avoiding a full-blown recession.

“I’ve managed money for 22 years. I can’t even remember a time when markets went down this much in such a short period of time and the treasury secretary . . . hasn’t stepped in front of a mic,” said a hedge-fund manager. “The silence is deafening. It’s unreal.”

But bankers never fail to seize on an opportunity.

With cash seen as a safe alternative, the Bank of New York said it would charge some clients a 0.13 percent fee just to hold their cash.

The panic may have been fueled by runaway computer-driven trading desks. “The automated sell orders snowballed out of control,” one trader said.

Others, however, said people, not machines, were to blame.

“It’s not a flash crash,” said Michael Shaoul, of Marketfield Asset Management. “It’s much more orderly, and I don’t see any weird [trades] . . . You don’t see money markets going crazy. It’s a plain and simple liquidation of equities and commodities.” With Post
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chuck.bennett@nypost.com