Business

Stocks plummet as Dow closes below 12,000

US stocks were routed Thursday as rumblings of unrest in Saudi Arabia compounded economic worries abroad and in the US.

The Dow Jones Industrial Average slipped under 12,000 as it ended down 228.48 points, or 1.9 percent, at 11984.61. Pressure on the major indexes intensified late in the day with reports that Saudi Arabian police fired rubber bullets to disperse about 200 Shiite protesters in the eastern town of Qatif, injuring at least three. Major indexes had already been lower after a downgrade of Spain’s government debt, worry about trade in China and a disappointing read on US employment.

One day ahead of an expected “day of rage” by protesters in Saudi Arabia, the reaction to the gunfire reports illustrated investors’ sensitivity to signs of unrest in the oil-rich kingdom.

“Saudi Arabia is the most important component for oil exports,” said Karl Mills, chief investment officer at Jurika Mills & Kiefer. Mills cautioned that the country is in a different situation than in Libya, but turmoil there could “cause some fear and panic in the markets.”

Caterpillar led the Dow lower, falling 3.9 percent. Energy stocks were also weak, as Exxon Mobil fell 3.6 percent. All of the Dow’s components were in the red except for McDonald’s, which rose 1.2 percent. The Dow had not staged this big of an intraday point drop since Aug. 11.

The Standard & Poor’s 500-stock index retreated 24.91 points, or 1.9 percent, to 1,295.11 as its energy and materials components slumped. The Nasdaq Composite fell 50.7 points, or 1.8 percent, to 2,701.02.

Before the Saudi reports, stocks were lower as Moody’s Investors Service downgraded Spanish debt and China reported the slowest export growth since 2009 in February compared with the year-earlier period.

The market also got a disappointing read on the state of employment in the US. The Labor Department reported initial claims for unemployment benefits unexpectedly rose for the week ended March 5. Separately, the Commerce Department said the trade deficit hit its highest level in seven months.

“It’s really been the headlines from the Middle East that continue to dominate market sentiment,” said Joseph Tanious, market strategist at J.P. Morgan Funds, overshadowing the past few months’ stronger US economic data and other positives in investors’ focus.

Among stocks in focus, General Motors fell 2.6 percent after the automaker said Chief Financial Officer Chris Liddell will leave the company early next month.

Green Mountain Coffee Roasters soared 41 percent after the company and Starbucks announced a partnership for the sale of Starbucks and Tazo-tea-branded K-Cup portion packs for use in Green Mountain’s Keurig Single-Cup brewing system. Starbucks rose 10 percent.

Human Genome Sciences rose 13 percent after the Food and Drug Administration approved a lupus drug that will be the first new treatment for the autoimmune disease in more than 50 years.