Traders work on the floor of the New York Stock Exchange. (Jin Lee / Bloomberg )
NEW YORK -- Stocks faced another broad selloff Friday as investors feared a slowdown in emerging markets and the Federal Reserve's move to scale back its easy-money policies.
The Dow Jones industrial average was down about 200 points in midday trading on Wall Street, following sharp drops in other major stock markets in Europe and Asia.
The Dow at one point fell 203.56 points, or 1.3%, to 15,993.79 -- below the psychological milestone of 16,000 the index burst through during an epic rally last year.
The broader Standard & Poor's 500 index was off 25 points, or 1.4%, to 1,803.46. The technology-focused Nasdaq composite index was down 65.07, or 1.5%, to 4,153.80.
Investors, meanwhile, plowed into U.S. Treasury bonds. The yield on the benchmark 10-year Treasury fell to 2.74%, off recent highs of around 3%.
Stocks slid about 1% on Thursday after economic data out of China pointed toward a slowdown in factory output. On Friday, investors were rattled by political unrest in Turkey and financial turmoil in Argentina.
Last year's rally was fueled in part by the Fed's monumental stimulus program, known as quantitative easing. That program has kept interest rates low as a way to stimulate economic growth, and helped push investors into riskier assets such as stocks.
But as the Fed begins to taper its stimulus starting this month, investors appear to be pulling out of riskier assets -- and some emerging markets are feeling the effects of that retreat.
“There was a lot of liquidity ... that just kept the party going overseas,” said Karyn Cavanaugh, a market strategist with ING U.S. Investment Management. "Now that the word is out that the Fed is tapering -- and indeed they are tapering -- there are worries that the liquidity is going to dry up and that people are pulling their money back.”
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