A sell-off in stocks accelerated Monday afternoon following the news of explosions at the Boston Marathon.
The Dow Jones industrial average, which had been in the red all day, fell 266 points, or 1.8%. About 120 points of that drop took place following the reports of the explosions in Boston.
CNN reported that two explosions were heard near the finish line of the Boston Marathon shortly before 3 p.m. Eastern. (Read CNN.com for the latest on the explosions.)
Earlier in the day, stocks had already slumped worldwide, gold prices plunged and investors flocked to lower risk assets like U.S. Treasuries. The initial sell-off began after investors awoke to news that China’s economic growth had slowed in the first quarter.
What happened in China? The Chinese economy grew 7.7% in the first quarter, compared with a year earlier. The report was “disappointing” and confirmed China’s recovery is fragile, said Qu Hongbin, HSBC’s co-head of Asian economic research.
Economists had been expecting the Chinese economy to grow 8%, and because it reflected weaker global demand for Chinese goods and services, the news also drove stocks in Asia and Europe lower.
China is the world’s second-largest economy after the United States, and is considered one of the top engines of global economic growth. Case in point: 7.7% growth per year is considered weak in China, while the U.S. economy would be lucky to grow around 3% annually.
A separate report also showed industrial production growth slowed sharply in China in March. Heavy manufacturing related to steel, power and telecommunications equipment showed the most weakness.
Gold bugs get zapped. Gold plunged more than 9% to settle at $1,361 an ounce and popular gold ETF SPDR Gold Trust (GLD) fell 8.8%.
The Australian and New Zealand dollars both fell against the U.S. dollar following the weak Chinese data. Both countries rely heavily on China as an importer of their raw materials.
Investors also opted for the safety of the U.S. dollar against the euro and British pound. Demand for U.S. bonds rose, and the yield on the 10-year Treasury note slid to 1.7%.
Bracing for barrage of bank and tech earnings. On the flipside, Citigroup (C, Fortune 500) had some good news. The bank reported a better-than-expected 30% jump in net income, to $3.8 billion. Revenue also topped forecasts, rising 6% in the latest quarter.
Goldman Sachs (GS, Fortune 500), Bank of America (BAC, Fortune 500) and Morgan Stanley (MS, Fortune 500) are on tap to report results later this week. Tech giants will also report results later this week, with Yahoo (YHOO, Fortune 500), Google(GOOG, Fortune 500) and Microsoft (MSFT, Fortune 500)all on deck.