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NEW YORK (CNNMoney) — The Federal Reserve’s gloomy comments on the economy sparked widespread selling across U.S. stock and oil markets Thursday.
The selling was exacerbated by a weak report on unemployment claims.
The Dow Jones industrial average () tumbled 208 points, or 1.7%, with 28 out of the 30 blue chip components in the red.
Oil prices plunged more than 4% after the International Energy Agency announced its 28 member nations agreed to release 60 million barrels of oil in the coming month to make up for shortfalls caused by the Libya crisis.
The SP 500 () lost 18 points, or 1.4%. The Nasdaq Composite ( ) shed 29 points, or 1.1%.
“The market is spooked because Benny has no clue,” said one NYSE trader, adding that the “economy is in the crapper, and [there’s] no clarity on the future.”
StockTwits chatter focuses on oil
U.S. stocks started falling Wednesday after Fed chief Ben Bernanke issued a dour assessment of the economy but gave no indication that any additional stimulus measures are in the works.
Those comments and the oil price plunge has unnerved investors. Wall Street’s fear gauge, the VIX () spiked 12% Thursday.
“Earlier this spring there was too much complacency, too much optimism about the economy,” said Brian Lazorishak, senior vice president at Chase Investment Counsel. “We need to wash out some of the complacency, and clearly the VIX going higher is one sign that that is occurring.”
Currencies and commodities: The dollar bounced 1.3% against the euro, and managed modest gains versus the Japanese yen and the British pound.
The dollar’s strength is contributing the the commodity sell-off.
Gold futures for August delivery fell $32, or more than 2%, to $1,521 an ounce. And silver prices sank 4.1% to $35.24 an ounce. Copper prices slid 1.3% and natural gas prices dropped nearly 3%.
Economy: A report on initial claims also brought disappointing news, showing 429,000 Americans filed for their first week of unemployment benefits last week.
That was far weaker than the 413,000 claims economists had expected and marked the 11th straight week that claims have been above 400,000.
Later in the morning, a report from the Census Department showed sales of new homes fell 2.1% in May, after rising for two months in a row, as the housing market continues to struggle.
Companies: Shares of Red Hat () added 3.2%, after the open source/cloud computing company reported better-than-expected first-quarter results and hiked its full-year forecast late Wednesday.
Pfizer (Fortune 500) and Bristol Myers Squibb ( , Fortune 500) released positive results from trials of its blood thinner, Eliquis, late Wednesday. Shares of Pfizer rose 1.5% in morning trading, while shares of Bristol Myers Squibb climbed 5.5%.,
Homebuilder Lennar () released earnings results before the opening bell Thursday, posting a 65% drop in quarterly profit. But because that was better than investors had expected, shares rose 2.1% in morning trading.
Software maker Oracle (Fortune 500) will report earnings after the market close Thursday. Analysts expect Oracle to have earned 71 cents a share. Earnings from HR Block ( ) will also be released.,
World markets: European stocks closed lower. Britain’s FTSE 100 slipped 1.7%, the DAX in Germany tumbled 1.8% and France’s CAC 40 dropped 2.3%.
In Asia, the Shanghai Composite ended up 1.5%, the Hang Seng in Hong Kong slid 0.5% and Japan’s Nikkei lost 0.3%.
Bonds: The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 2.91% from 2.99% late Wednesday.
— CNNMoney’s Poppy Harlow contributed to this report