Stocks Plunge on Jobs, Gloomy Fed Statement

ABC News(NEW YORK) -- The U.S. stock market plummeted after a rocky of day of trading on Thursday.

The Dow Jones industrial average fell 391.01 points, or 3.51 percent, closing at 10,733.83. The NASDAQ ended the day down 3.25 percent at 2,455.67.

Early in the day the Dow was down more than 500 points. U.S stock markets started a sell-off Wednesday after the Fed announced its latest effort to boost the economy but also said that there are "significant downside risks" to the global economy. Things went from bad to worse as global stock markets followed the negative trend that then continued in trading in New York on Thursday.

Thursday was the biggest one-day point and percentage drop on the Dow since Aug. 10, 2011. It was also the biggest two-day point drop on the Dow since November 2008, when the economy was in the depths of the recession.

Investors are clearly panicking about the threat of another recession in the U.S. and Europe.

European leaders cannot seem to come up with a bold consensus to deal with the crisis in their economies, while there was yet another example of the bickering in Washington as GOP leaders failed to pass a stop-gap bill in Congress.

The Labor Department announced earlier in the day that applications for unemployment claims fell 9,000 last week to 423,000, higher than the 420,000 claims economists expected.

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