NEW YORK — Signs of a subdued economic recovery sent investors out of stocks Thursday and in search of safer assets like the dollar.
Major indexes tumbled about 1 percent, including the Dow Jones industrial average, which lost 94 points but ended well off its low. Energy and material stocks logged some of the biggest losses as a jump in the dollar sent commodity prices tumbling. Meanwhile, an analyst's downgrade of the chip industry pulled technology shares sharply lower.
Tech stocks could get hit again Friday following a report from Dell Inc. that sales of its computers to big businesses remain sluggish. After the closing bell, the company posted quarterly revenue and profits that fell short of analysts' forecasts. Dell shares slid 6 percent in after-hours trading.
As stocks fell, investors flocked to the dollar and Treasurys. The yield on the three-month T-bill, considered one of the safest investments, tumbled to its lowest level since December. The Chicago Board Options Exchange's Volatility Index, also known as Wall Street's fear gauge, rose more than 4 percent.
Overseas markets also fell sharply. The day's trade was a shift out of riskier assets and back into safe havens like the dollar and Treasurys. After amassing significant gains during an eight-month rally in stocks, investors are hesitant to take on too many risks as the year ends, worried that the economy's rebound might not be sustainable.
"Large money managers, going into the end of the year, are looking to protect their gains and are shifting assets," said Adam Gould, senior portfolio manager at Direxion Funds in New York.
For much of this year, investors have been selling dollars and putting their money in riskier assets like stocks and commodities that have the potential to earn higher returns.
Now, investors are wondering whether the dollar's slide has run its course and whether other markets have gotten overheated considering the many challenges to the economy including high unemployment.
Reports on the economy gave investors little incentive to hold on to stocks. Figures from the Labor Department indicated that employers are still shedding jobs, and the Mortgage Bankers Association reported a surge in foreclosures.
