U.S. Markets Tumble as Fear Spreads

Stocks Post Worst Loss in Seven Months as Investors World-Wide Confront Pullback in Stimulus, Growth Worries.

U.S. stocks tumbled Friday to their biggest loss in more than seven months, extending a global selloff that investors fear signals turmoil to come as financial markets adjust to a pullback in central-bank stimulus.

The declines extend a dark beginning of the year for equity investors world-wide, a jarring drop for markets that climbed imperviously through 2013.

The Dow Jones Industrial Average fell 318.24 points, or 2%, to 15879.11. The Stoxx Europe 600 lost 2.39%, and Germany’s DAX, down 2.48%, had its sharpest fall in months. The Nikkei also fell 1.94%.

While those drops were dramatic, much of the pain of investors’ readjustment is landing on developing economies, from Brazil and India to Thailand and South Africa.

In recent years they were buoyed by the high tide of cash from the U.S. Federal Reserve’s stimulus and by China’s voracious growth.

Now, those forces are receding, with the Fed expected to reduce monthly bond purchases again on Wednesday.

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