U.S. stocks plunge to decade low

By Herbert Lash

NEW YORK (Reuters) - Fear of a deep global slowdown ripped through financial markets on Thursday, wiping out a decade of U.S. stock market gains and driving yields on government debt to record lows as aversion to risk exploded.

A bearish U.S. jobs report intensified concerns of a long recession and crushed expectations for energy demand, sending crude oil down more than 7 percent to below $50 a barrel.

The bleak economic outlook triggered technical breaches by major stock indexes around the world, which could unleash even greater turmoil as sentiment among investors darkens and threatens to spiral markets into a deeper worldwide slump.

"You have fear in the market that you haven't had since the 1930s," said Bryan Taylor, chief economist with Global Financial Data in Los Angeles.

Investors stampeded into low-risk assets as they abandoned stocks for U.S. government debt and the risk-averse yen. Ultra-short bill rates fell towards zero percent and two-year yields set a series of record lows.

The S&P 500, the benchmark for U.S. institutional investors, fell to its lowest closing level since April 1997, while other U.S. indexes and benchmarks in Europe and Asia set 5-1/2-year lows. Almost one out of every two of the 3,249 issues traded on the New York Stock Exchange hit 52-week lows.

The Wilshire 5000 index, the broadest measure of U.S. stock markets, has now fallen by more than 50 percent since its peak on October 9, 2007. The fall is more than when the dot-com bubble burst from March 2000 to October 2002, the start of a five-year rally.

Shares of corporate icons Citigroup, General Motors and Ford plunged anew as all three traded below $5 a share, before news of possible legislation to help the automakers led GM and Ford, which almost fell below $1, to rebound sharply.