Stocks fell sharply Monday as worries the U.S. economy sparked a world-wide sell-off.
The Dow Jones Industrial Average tumbled more than 1000 points on Monday or 2.6%, while the broader S&P 500 index fell 3%. Japan's Nikkei average suffered its worst day since 1987, falling more than 12%.
A measure of market fear more than doubled, after a rise in the U.S. unemployment rate triggered worries that the country could be headed for recession.
Technology stocks, which had been at the forefront of a recent boom in markets are being pummeled. Long-term investor Warren Buffett revealed that Berkshire Hathaway had cut its stake in Apple by half during the second quarter, sending shares in the company down over 5%.
Some analysts wonder if the sell-off is an overreaction. While last week's jobs report was weaker than expected, U.S. employers continue to add jobs. The unemployment rate rose to 4.3% not because of widespread layoffs but because more than 400,000 new workers joined the labor force last month.
A survey of services sector managers released Monday offered some reassurance that the U.S. economy is not on the verge of contraction. The survey, from the Institute for Supply Management, showed that unlike the manufacturing sector, which is stuck in a slump, the larger services side of the economy continued to grow in July with new orders, production and employment all expanding.
