Stocks fall sharply on concerns over growth prospects

Fears over slowing global growth hammered stocks in the U.S. and Europe on Friday and lifted prices of government bonds and other assets seen as safer bets.

The selling pushed down major stock indexes in Europe before spreading to the U.S. The Standard and Poor’s 500 index slumped to its biggest loss in more than two weeks as all 10 industry sectors of the broad market gauge fell. The drop was led by energy shares.

Stocks slumped a day after the Federal Reserve decided to hold interest rates near zero. That means borrowing costs will remain low for a while yet, a prospect that has in the past typically boosted stocks. But some investors, expecting the Fed would be confident enough to nudge rates up by at least a quarter of a point, interpreted the stand-pat stance as a sign that the global economy is dangerously weak.

The Fed has kept its benchmark rate close to zero for almost seven years. In that time, U.S. stocks have tripled from their financial crisis low. The Fed meets again next month and in December.

The Dow Jones industrial average ended down 289.95 points, or 1.7 percent, to 16,384.79. The S&P 500 slumped 32.12 points, or 1.6 percent, to 1,958.08, and the Nasdaq composite shed 66.72 points, or 1.4 percent, to 4,827.23

Bonds rallied as investors sought safety. The benchmark 10-year Treasury note gained, pushing down its yield to 2.13 percent. Gold also gained.

This story was originally published September 18, 2015 at 5:12 PM with the headline "Stocks fall sharply on concerns over growth prospects."