Dow Closes Down More Than 600 Points After British Vote To Leave EU
NEW YORK (CBSNewYork/AP) -- Stocks took a plunge worldwide Friday after Britain voted to leave the European Union.
As CBS2's Tony Aiello reported, polls said the UK would vote to remain in the EU, the polls were wrong and markets reacted with shock.
The Dow Jones industrial average dropped 611 points, or 3.4 percent, to 17,399 in heavy trading Friday.
The Standard & Poor's 500 index fell 75 points, or 3.6 percent, to 2,037. The Nasdaq composite sank 202 points, or 4.1 percent, to 4,707.
It was the biggest drop for the Dow and S&P 500 since August and the worst fall for the Nasdaq since 2011.
Some European markets fell even more. France's benchmark index lost 8 percent and Germany's fell 7 percent. Britain's fell 3 percent.
Bond prices rose sharply as investors sought safety.
The yield on the 10-year Treasury note dropped to 1.57 percent from 1.75 percent a day earlier, a huge move.
"Europe is an important economic center. Europe matters quite a bit to the global economic picture," Jim Russell, a principal and portfolio manager at Bahl & Gaynor, told CBS MoneyWatch. "The uncertainty is what the markets are going to react to over the next few trading days."
The result stunned investors, who reacted by rushing to the safety of gold and U.S. government bonds as they wondered what will come next for Britain, Europe and the global economy.
U.S. stocks took far smaller losses than markets in Europe and Asia, but were still sharply lower.
MORE: Full Coverage From CBS News MoneyWatch
"We'll see how much of an impact it will make on the economy, the domestic economy here in the U.S.," Yelena Shulyatyeva with Bloomberg Intelligence told CBS2's Tony Aiello. "Right now, we don't think it's going to be a major impact."
European markets fell even more.
Britain's FTSE lost 5 percent and the German index tanked 10 percent. The British pound hit its lowest level since 1985, trading at $1.39.
Madrid's benchmark Ibex 35 index followed the slide of other markets and was down more than 10 percent in early morning trading Friday.
Earlier Friday, Japan's Nikkei dropped 8 percent, its biggest fall since 2008.
Many in the U.S. saw the volatility and wondered where to stash their cash.
"I basically hide it under my bed," one man said.
"Hold my breath and ride it out right now, but it's pretty scary for anybody that has money in the markets or a business, or anything," Lincoln Combs added.
There's no one-size-fits all to deal with market volatility, other than the age-old adage to assess your tolerance for risk and invest accordingly.
"I'm afraid that markets will remain quite shaky, because tomorrow there will not be more certainty than today," economist, Peter Vanden Houte explained.
England is the world's fifth largest economy.
It's vote to leave the EU is unprecedented and no one can say for sure how it will all play out.
"Unknown right now, what people need to bear in mind, is we're not flipping a switch and all of a sudden the UK is out of the EU. This will be a long process," NYSE Trader, Keith Bliss said.
Britain voted to leave the European Union after a bitterly divisive referendum campaign over concerns including immigration and regulation. In the end, U.K. voters were split 52 to 48 percent to leave the 28-nation bloc.
Even in the midst of uncertainty there is opportunity.
The British pound has tumbled against the dollar, and travel experts say this will be a great summer to cross the pond.
"The flights are cheaper, the hotels are cheaper, there has never been a cheaper time to take that dream vacation to London," Conde Nast Traveler, Mark Ellwood said.
That very dynamic will make New York more expensive for visitors from the UK, which sends more tourists here than any other nation including Canada.
(TM and © Copyright 2016 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2016 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
