Global economic woes gripped investors on Tuesday, roiling financial markets from Tokyo to Dublin to New York.  Worries that started in Asia continued in the U.S. after housing numbers painted a grim picture of the economy.  In the U.S., the Dow Jones Industrial Average dropped to its lowest close in seven weeks. The Dow finished down 133.96 points, or 1.3%, at 10040.45, its fourth consecutive decline and its ninth losing session in the past 11. The measure fell below 10000 during the day.  Day after day, investors have been hit with more evidence that the economy is stalling. The Dow is down over 4% this month, after an ebullient July that was fueled by impressive earnings results from U.S. companies.  The Dow posted another triple-digit loss today and at one point fell below the 10,000 level. Michael Casey has details about the factors driving today's market action.  But earnings season is now over and investors are far more focused on potential troubles ahead, from the U.S. economy to Europe's sovereign-debt woes and lingering worries about slowing demand in China. As well, Japan's economy is under threat from a relentless rise in the yen.  The selloff on Tuesday began in Asia where the Nikkei Stock Average fell 1.3%, pulling the Japanese index into bear-market territory. Stocks of large exporters tumbled as the yen reached 15-year highs. Investors have piled into the currency, which is seen as a safe-haven in times of crisis.  A plunge in U.S. existing home sales is adding to weakness across the markets as investors once again fret about the global growth outlook. Stocks and commodities are seeing big moves, not least gasoline, which is closely correlated with consumer demand. Paul Vigna, Anna Raff and Mike Reid discuss.  The declines spread to Europe where sovereign-debt worries have re-emerged. In Ireland, concern about the health of the country's banking system sent stocks there down 5.8%. Standard & Poor's late on Tuesday downgraded the country's credit rating.  Stock indexes are on track for a fourth consecutive decline.  Crude-oil futures slumped, dropping 2% to below $72 a barrel, an 11-week low. Copper shed 1.6% as gold edged up to $1,231.80 an ounce, within 2% of its record close.  Investors loaded up on Treasurys as they scrambled to limit their exposure to a teetering economic recovery.  Yields on the benchmark 10-year note, which move in the opposite direction of prices, spent much of the day below 2.50%—the lowest since January 2009. An auction for two-year Treasurys also was heavily bid, settling at its lowest yield ever. The two-year note finished at 0.479%.  "If people had confidence, they wouldn't be pouring money into Treasury securities yielding nothing, and paying more than $1,200 for an ounce of gold," said Morris Mark, president of Mark Asset Management. "There's a concern here that the strength of the world economy is not going to be able to get us out of this."  The Nasdaq Composite Index fell 1.7% and the Standard & Poor's 500-stock index slipped 1.5%, led by its materials sector as investors fretted over weak demand in a slackening economy.  The typically defensive health-care sector also weighed, hurt by weak revenue and pessimism from medical-device giant Medtronic, which lost 11% to lead S&P 500 decliners. Airlines and shipping companies, meanwhile, pulled down the Dow Jones Transportation Average, which lost 1.9%.  The Chicago Board Options Exchange's volatility index, or VIX, rose 12% intraday to reach its highest point since early July, closing up 7%. Decliners handily outpaced gainers in weaker-than-average NYSE Composite volume, with about 86% of trading volume to the downside.  Write to Donna Kardos Yesalavich at donna.yesalavich@dowjones.com andJonathan Cheng at jonathan.cheng@dowjones.com.
Investors sent U.S. stocks to a broad and sharp decline, snapping up safe-haven Treasurys as they feared a protracted and uncertain recovery.