Dow Jones Industrial Average Tumbles 512 Points in Steepest Stock Market Loss Since 2008

The Dow Jones industrial average took a huge 512-point dive in the stock market on Thursday, making this the largest drop the index has taken since the financial crisis in 2008. Officials say the drop largely represented investors’ fears of problems plaguing the global economy, especially in Europe.

Stock Market Drops Erase All Gains for the Year

Stock investments saw a shocking drop by the close of business on Thursday after the Dow plunged a whopping 512.76 points, which represented a 4.31-percent drop to 11383.68.

Unfortunately, this loss cancelled out all of its gains for 2011. It helped bring the index down 10 percent from its May intraday highs and was the biggest single-day drop since Dec. 1, 2008.

But the Dow wasn’t the only index to see major drops on Thursday.

The S&P 500 dropped 60.27 points–or 4.78 percent–to 1200.07, while the Nasdaq tumbled 136.68 points, or 5.08 percent, to 2556.39. Like the Dow, both indexes lost all of their gains for the year and pushed toward what is known as “correction territory.”

Investors Losing Faith in Global Economy

Experts say the reason for the drop in all three indexes was investors’ fears about the state of the global economy. Investors appear to have lost faith in the world policymakers’ ability to revive the economy and avoid a rolling debt crisis in Europe.

Specifically, problems have been brewing in Italy and Spain over the past few days. As a result, stocks have been dropping across the region and have begun affecting borrowing costs of peripheral nations by sending them soaring.

On the U.S. home front, investors are concerned that the jobs report will show low numbers instead of putting a dent in the stubbornly-high unemployment rate that still rests at 9.2 percent. Some say that anxiety about U.S. economic concerns likely prompted the sell-off on Thursday and could have a similar effect on the indexes on Friday.