Dow plunges over 200 points on downbeat data, geopolitical concerns

U.S. stocks dropped sharply at midday Thursday, with the Dow Jones Industrial Average plunging over 200 points, as a slump in durable goods orders and escalating geopolitical risks spooked investors.

At midday, the Dow sank 218.22 points, or 1.27 percent, to 16. 991.84. The S&P 500 shed 25.83 points, or 1.29 percent, to 1,972. 47. The Nasdaq Composite Index fell 75.59 points, or 1.66 percent, to 4,479.63.

New orders for manufactured durable goods tumbled 18.2 percent in August, said the U.S. Commerce Department Thursday. The decline partially offset a surge of 22.5 percent in July driven by strong demand for commercial aircraft.

Meanwhile, the number of Americans who initially applied for jobless benefits in the week ending Sept. 20 rose 12,000 to a seasonally adjusted 293,000, reported the U.S. Labor Department.

U.S. service sector activity continued to expand in September but at a slower pace, said financial data firm Markit. The seasonally adjusted Flash U.S. Services Purchasing Managers' Index posted 58.5 in September, down from August's final reading of 59.5 but still well above the neutral 50.0 threshold.

Analysts also cited rising geopolitical risks in Russia as a reason for the slump, after reports showed that a draft law submitted to Russia's parliament Wednesday would allow Russian courts to seize foreign assets on its territory.

Market volatility increased remarkably during this week, but analysts said it is still below historical average.

On Wednesday, the broader S&P 500 and the tech-rich Nasdaq rebounded from a three-day losing streak, as investors cheered better-than-expected U.S. new home sales data.