Stocks plunged in the U.S. and worldwide Friday after Britain voted to leave the EU. The result stunned investors, who reacted by rushing to the safety of gold and U.S. government bonds.
U.S. stocks gave up all their gains from earlier in the year. The Dow Jones industrial average tumbled 610.32 points, or 3.4 percent, to 17,400.75. The S&P’s 500 dropped 75.91 points, or 3.6 percent, to 2,037.41. Both indexes took their biggest losses since August. The Nasdaq composite suffered its biggest loss since mid-2011, down 202.06 points, or 4.1 percent, to 4,707.98. Indexes in Europe and Asia took even larger losses.
Bond prices surged and yields fell. The yield on the 10-year U.S. Treasury note dropped to 1.56 percent from 1.75 percent on Thursday.
Banks took the largest losses by far. Citigroup plummeted $4.16, or 9.4 percent, to $40.30 and JPMorgan Chase fell $4.45, or 6.9 percent, to $59.60. They have the most to lose in Britain’s departure from the EU because they do a lot of cross-border business in Europe based from their offices in London. They also become less profitable when bond yields fall, since that lowers interest rates on mortgages and many other kinds of loans.
Microsoft fell $2.08, or 4 percent, to $49.83 and IBM gave up $8.76, or 5.6 percent, to $146.59. DuPont gave up $3.21, or 4.6 percent, to $66 and LyondelBassel Industries lost $4.14, or 5.2 percent, to $74.91.
The pound fell dramatically, to $1.3638. At one point the British currency hit a 31-year low.
Oil prices sank. Benchmark U.S. crude declined $2.47, or 4.9 percent, to close at $47.64 a barrel in NY. Brent crude fell $2.50, or 4.9 percent, to $48.41 a barrel in London.
In addition to bonds, other safety assets also soared. Gold jumped $59.30, or 4.7 percent, to $1,322.40. That’s its highest price since July 2014. Silver rose 44 cents, or 2.5 percent, to $17.79 an ounce, its highest in more than a year. Gold producer Newmont Mining rose the most in the S&P 500 index. It climbed $1.80, or 5.1 percent, to $37.19 and set a three-year high.
High-dividend utility companies made tiny gains. Consolidated Edison rose $1.55, or 2 percent, to $78.41 and Duke Energy added 38 cents to $82.43.
Investors had sent stocks higher this week as they gradually grew more confident, based on polls and the changing odds in the betting market, that Britain would stay in the E.U. They sent the pound to its highest price of the year and sold bonds, pushing yields higher. Those gains were rapidly undone Friday.
Britain’s FTSE 100 dropped 3.1 percent. At one point it was 8 percent lower. The German DAX index sank 6.8 percent and France’s CAC 40 index tumbled 8 percent.
Japan’s Nikkei 225 finished a wild day down 7.9 percent, its biggest loss since the global financial crisis in 2008. South Korea’s Kospi sank 3.1 percent, its worst day in four years. Hong Kong’s Hang Seng index tumbled 4.4 percent and stocks in Shanghai, Taiwan, Sydney, Mumbai and Southeast Asian countries were sharply lower.
In other energy trading, wholesale gasoline sank 8 cents to $1.53 a gallon. Heating oil fell 7 cents to $1.46 a gallon. Natural gas lost 4 cents to $2.66 per 1,000 cubic feet.
In other currency trading, the dollar fell to 102.24 yen from 104.47 yen while the euro weakened to $1.1121 from $1.1351.