NEW YORK (Reuters) ? Stocks fell sharply in early afternoon on Thursday as nervous investors bailed out of the market, after the S&P 500 broke a key technical level.
There was no clear trigger for the sell-off. A number of sources cited talk about lack of progress in talks with the U.S. "supercommittee" charged with dealing with the nation's debt problems. No specific news has been released.
Losses accelerated around 1,225 on the S&P 500, which was described as a key technical level. The S&P 500 lost 1.1 percent in a span of 10 minutes after breaking that level.
"There was a flurry of futures trading and some technical levels where some sell-stops were triggered. Technically speaking 1,225 was kind of a key level, then the 100-day moving average was 1,222," said Michael Marrale, managing director, and head of sales trading at RBC Capital Markets in New York.
Declines in materials and energy shares accelerated with losses in oil and metals prices
Technology shares also dragged on the market, and the Nasdaq was down more than 2 percent at its session low. The S&P technology index (.GSPT) dropped 2.5 percent while the S&P energy index (.GSPE) fell 1.9 percent and the S&P materials index (.GSPM) declined 2.5 percent. U.S. crude futures prices slid more than 3 percent to $99.17 a barrel.
"Pretty much everything's for sale. There's a move toward cash, and bond prices are (up)," said Tom Schrader, managing director of U.S. equity trading at Stifel Nicolaus Capital Markets, in Baltimore.
The Dow Jones industrial average (.DJI) was down 144.78 points, or 1.22 percent, at 11,760.81. The Standard & Poor's 500 Index (.SPX) was down 19.32 points, or 1.56 percent, at 1,217.59. The Nasdaq Composite Index (.IXIC) was down 49.44 points, or 1.87 percent, at 2,590.17.
Earlier, Spanish bond yields hit 6.98 percent, their highest level since 1997, at a 10-year auction, while a French bond auction also drew high yields.
The 7 percent mark for bond yields is viewed by investors as unsustainable, as both Greece and Portugal were forced to seek bailouts after yields hit similar levels.
Investors have worried that the debt problems could tip the global economy into another recession, which would hurt U.S. growth, even though data here has suggested economy is picking up.
(Reporting by Caroline Valetkevitch; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)
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