NEW YORK (AP) -- Stocks plunged Tuesday, and bond prices rose, as the nuclear crisis in Japan intensified following a deadly earthquake and tsunami. The Dow Jones industrial average fell more than 200 points.
The market dropped sharply at the start of trading on news that dangerous levels of radiation are leaking from a crippled nuclear plant following last week's earthquake and tsunami. Investors sold because of the uncertainty about the impact the nuclear crisis would have not only on Japan, but also on companies in this country. Japan is the world's third-largest economy.
Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners, said fear had taken hold in the market.
"It's a situation where you sell, and you ask questions later," he said.
After initially falling as much as 297 points, the Dow backtracked was down 230 points, or 2 percent, to 11,762 in late morning trading. All 30 of the stocks in the Dow average were down.
The Standard & Poor's 500 index fell 26 points, or 2 percent, to 1,271. The Nasdaq composite index fell 54, or 2 percent, to 2,647.
All 10 company groups in the S&P fell. Technology stocks fared the worst, falling 2.4 percent. Many U.S. companies are dependent on Japanese factories for components. And power outages have made it nearly impossible for Japanese factories to produce semiconductors and other electronics, said Kim Caughey, equity research analyst at Fort Pitt Capital Group.
Jabil Circuit Inc., which makes parts for electronics and other technology companies, fell 3 percent.
Energy stocks also fell as the price of oil fell below $100 a barrel. Crude was down $3.95 at $97.22 a barrel as analysts anticipated lower demand because of the earthquake. Exxon Mobil Corp. and Chevron Corp. were each down about 1 percent.
Insurance companies that do business in Japan also fell sharply. Aflac Inc. was down 10 percent. The health and life insurance company does about 75 percent of its business in Japan, but said it was well prepared to handle claims in the country. Hartford Financial Services Group Inc., which also has operations in Japan, fell 6 percent.
Stocks have been fluctuating sharply since the quake on Thursday. The Dow fell 228 points Thursday, and came back 59 Friday. The market has a long history of bouncing back after a big drop. But an extended period of volatility is likely until the situation in Japan becomes clear.
Investors sought the relative safety of U.S. Treasurys, sending prices higher and yields lower. The yield on the 10-year Treasury note dropped to 3.23 percent from 3.36 percent late Monday.
The Federal Reserve was holding a regularly scheduled meeting Tuesday. Little change in monetary policy was expected from the meeting. However, investors wanted to know if the Fed forecast any damage to the economy from the disaster in Japan. The Fed was scheduled to issue a statement on the economy at 2:15 p.m. Eastern time.
(Copyright 2011 by The Associated Press. All Rights Reserved.)