Stocks sink in midday trading; gold plunges

NEW YORK — A steep fall in commodity prices pulled down energy and mining stocks for a second day on Monday.

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," said Frank Fantozzi, CEO of Planned Financial Services, a wealth management firm. "People who have been holding on to gold expecting a rebound are now thinking, 'I better get out.'"

The Dow Jones industrial average was down 89 points at 14,776 at noon, a drop of 0.6 percent. Caterpillar led the Dow lower, losing 3 percent to $82.72.

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.

The plunge in commodity prices hit mining and energy stocks. Freeport-McMorRan Copper & Gold fell 7 percent to $29.65. Analysts at Citigroup placed a "sell" rating on the mining giant on the expectation that copper prices will continue sliding.

Of the 10 industry groups in the S&P 500, materials and energy stocks fared the worst, sliding 3 percent. Cliffs Natural Resources lost 8 percent to $17.73, the biggest drop in the S&P 500.

Citigroup rose 3 percent to $46.05, 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 16 percent to $7.20. Dish fell 6 percent to $35.28.

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. Both stocks jumped. Thermo Fisher rose 3 percent $82.21, and Life Technologies rose 8 percent $73.23.

In other trading, the Standard & Poor's 500 index fell 13 points to 1,576, a loss of 0.8 percent. The Nasdaq composite fell 29 points, or 0.9 percent, to 3,266.

In the market for U.S. government bonds, the yield on the 10-year Treasury note dipped to 1.71 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.

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