Stocks drop in afternoon trading; gold plunges

In this Friday, April 12, 2013, photo Trader Lewis Vande Pallen, right, works on the floor of the New York Stock Exchange. World stock markets mostly sank Monday April 15, 2013 as China's slower-than-expected economic growth and disappointing U.S. retail sales weighed on investor sentiment. (AP Photo/Richard Drew)

NEW YORK (AP) — A steep fall in commodity prices pulled down energy and mining stocks for a second day on Monday. The Dow Jones industrial average dropped more than 200 points, putting it on course for its worst loss since February.

Gold plunged below $1,400 an ounce for the first time in two years as a sell-off in metals continued from last week. Oil prices hit their lowest level since mid-December.

"I think you're getting some panic selling right now" in the gold market, said Frank Fantozzi, CEO of Planned Financial Services, a wealth management firm.

The Dow was down 207 points at 14,658 as of 3:14 p.m., a drop of 1.4 percent. Caterpillar, which makes heavy equipment used by miners, led the Dow lower with a drop of 3 percent to $82.67.

A report that China's economy unexpectedly slowed pummeled copper and other commodities. The world's second-largest economy expanded by 7.7 percent in the first three months of the year, well below forecasts of 8 percent or better.

Gold prices dropped $140 to $1,361 an ounce, a 9 percent fall. It has fallen $203 an ounce over the past two days. Crude oil slid $2.58 to $88.71 in New York trading.

The plunge in commodity prices hit mining and energy stocks. Cliffs Natural Resources lost 8 percent to $17.65. Freeport-McMoRan Copper & Gold fell 8 percent to $29.52. Analysts at Citigroup placed a "sell" rating on the mining giant on the expectation that copper prices will continue sliding.

In other trading, the Standard & Poor's 500 index slumped 26 points to 1,562, a loss of 1.7 percent. Of the 10 industry groups in the S&P 500, materials and energy stocks fared the worst, sliding 3 percent.

The Nasdaq composite fell 67 points, or 2.1 percent, to 3,227.

Among rising stocks, Citigroup rose 2 percent to $45.87, one of the best gains in the S&P 500. The country's third-largest bank reported earnings that beat analysts' estimates thanks to stronger revenue from trading and investment banking.

Sprint Nextel jumped after Dish Network offered $25 billion to buy the company. Dish's bid is aimed at beating an offer from the Japanese phone company SoftBank. Sprint surged 13 percent to $7.01, while Dish fell 6 percent to $35.41.

Thermo Fisher Scientific offered to pay $13.6 billion to buy genetic testing equipment maker Life Technologies. Thermo Fisher agreed to pay $76 in cash for each share of Life Technologies. Life Technologies rose 7 percent $73.05.

In the market for U.S. government bonds, the yield on the 10-year Treasury note dipped to 1.70 percent from 1.72 late Friday. The yield remains near its low point of the year, 1.69 percent, reached April 5 following news that U.S. employers hired far fewer workers than expected last month.