Stocks plunge at opening on Wall Street

Investors’ rising fears about consumer spending are turning stocks into a risky investment again.

Stocks plunged and Treasury prices soared Monday as investors around the world feared that consumers are too anxious to lift the economy into recovery. The losses on stock exchanges extended the heavy selling that began Friday with a disappointing reading on consumer confidence. And bond investors, once again searching for a safe investment, bought heavily into Treasurys.

The Dow Jones industrials were down more than 180 points, while overseas, the Shanghai stock market fell almost 6 percent and the major indexes in Europe were all down more than 1.5 percent.

Stocks were down across all industries as investors worried that consumers’ reluctance to spend will hurt corporate earnings. Many companies second-quarter results were boosted by cost-cutting, not higher sales, and the fear is that without a pickup in sales, earnings will fall.

While other parts of the economy, including housing and manufacturing, are showing signs of progress, the country cannot have a strong recovery unless consumers are spending more freely. Their spending accounts for more than two-thirds of economic growth.

Traders got more bad news about the consumer Monday when home improvement retailer Lowe’s Cos. said poor weather and cautious consumer spending caused sales to fall 19 percent in the second quarter. Lowe’s missed analysts’ forecasts.

Investors will be nervous as they wait for more retailers to report second-quarter earnings this week. Last week, the nation’s largest retailer, Wal-Mart Stores Inc., said its most important sales figure, those from stores open at least a year, fell during the April-June period.

Dow Jones industrial average fell 180.69, or 1.9 percent, to 9,135.57. Standard & Poor’s 500 index fell 22.86, or 2.2 percent, to 981.23, while Nasdaq composite index fell 46.34, or 2.3 percent, to 1,939.18.

Overseas, Japan’s Nikkei stock average fell 3.1 percent as investors weren’t satisfied by news that the country had emerged from recession in the second quarter. In afternoon trading, Britain’s FTSE 100 fell 1.5 percent, Germany’s DAX index fell 1.6 percent, and France’s CAC-40 fell 2.1 percent.

Oil prices also extended their losses, reflecting the growing concerns about a weak economy that will curtail demand for energy. A barrel of crude oil fell $1.70 to $65.81 on the New York Mercantile Exchange.

Meanwhile, bond prices rose as investors, once again wary about the stock market, sought the safety of Treasurys. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.50 percent from 3.57 percent late Friday.