Stocks plunge as Japan nuclear crisis worsens

Stocks plunged Tuesday, sending the Dow Jones industrial average down almost 300 points at the opening, as the nuclear crisis in Japan intensified following a deadly earthquake and tsunami.

Dangerous levels of radiation began leaking from a crippled nuclear plant Tuesday, forcing Japan to order 140,000 people to stay indoors. Japan's prime minister also warned that more leaks could occur.

Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners, said fear had taken hold in the market as traders worried about the nuclear crisis and a possible slowdown in Japan's economy, the world's third-largest.

"It's a situation where you sell, and you ask questions later," he said.

The New York Stock Exchange enacted a process at the start of trading to help smooth out volatility. The so-called Rule 48 was aimed at responding to the "volatility in the pre-market," said Rich Adamonis, a spokesman for the exchange.

After initially falling as much as 297 points, the Dow backtracked a bit and was down 239 points, or 2 percent, to 11,758 in early trading.

The Standard & Poor's 500 index fell 30 points, or 2.4 percent, at 1,265. The Nasdaq composite index fell 77, or 2.8 percent, at 2,623.

All 10 company groups in the S&P fell. Energy stocks fared the worst, falling 2.6 percent.

Investors flocked to the relative safety of U.S. Treasurys, sending prices higher and yields lower. The yield on the 10-year Treasury note dropped to 3.23 percent from 3.36 percent late Monday.

Oil prices fell $3.95 to $97.22 as analysts anticipated lower demand in the aftermath of the earthquake.

Other commodities, including gold, silver and copper, also fell.

In corporate news, Impax Laboratories Inc. rose 6.9 percent in morning trading after a Collins Stewart analyst said a potential Parkinson's disease treatment could generate as much as $400 million in annual U.S. sales.

(Copyright 2011 by The Associated Press. All Rights Reserved.)