US stocks slump as Japan nuclear crisis escalates

‎U.S. stocks plunged in early trade on Tuesday, following sell-off in European and Asian stock markets amid fears of a nuclear disaster in Japan.

The S&P 500 Index declined 28.57 points, or 2.20 percent, to trade at 1,267.36 at 9:35 EDT. The Dow Jones Industrial Average plunged 243.40 points, or 2.27 percent, to trade at 11,749.76. The Nasdaq Composite Index slumped 2.72 percent.

Japanese stock markets slumped for the second day on escalating fears of a nuclear crisis after a radiation leak was detected at the Fukushima Daiichi nuclear plant and residents were warned to stay indoors. Benchmark Nikkei index slumped 10.55 percent or 1,015.34 to 8,605.15 after plunging 6.18 percent in the previous session. Meanwhile the Topix index plunged 9.47 percent to 766.73 and recorded its worst two-day slump since 1987.

Japan informed the Vienna-based U.N. atomic watchdog that the spent fuel storage pond at the Unit 4 reactor of the Fukushima Daiichi nuclear power plant is on fire and radioactivity is being released directly into the atmosphere. Dose rates of up to 400 millisievert per hour have been reported at the site.

On the economic front, investors are likely to focus on the FOMC meeting and interest rate decision, which is due to be released at 2:15 pm EDT. The FOMC will probably maintain its current monetary policy as the world’s largest economy is still on its way to recover from the worst recession since the Second World War.

The interest rate is expected to remain unchanged at 0.25 percent. The Federal Reserve kept interest rates at historic lows in the range between 0 percent and 0.25 percent in an attempt to increase consumer consumption and business operations by making borrowing cheaper to revive the economy.

On corporate front, shares of General Electric Co. (NYSE:GE) declined 7.81 percent to $18.77. The company designed all six of the reactors at the Fukushima Daiichi nuclear plant in Japan.

Among the Dow components, Alcoa, American Express and Cisco plunged more than 3 percent, while Boeing, Bank of America, Disney and Verizon slumped more than 4 percent.

U.S. stocks ended lower on Monday, as investors were worried about the impact of the devastating earthquake and tsunami in Japan on the global economy.

The euro declined 0.64 percent to 1.3902 against the dollar and the yen gained 0.92 percent against the greenback.

Crude oil futures plunged 3.31 percent to $97.84 a barrel and gold futures declined 2.39 percent.

European stock markets are currently trading lower with FTSE 100 down by 136.13 points, DAX30 down by 321.02 points and CAC 40 down by 143.11 points.