U.S. Markets Plummet As Financials Continue To Slide

New York, NY (AHN) - U.S. markets sold off big as investors did not find much solace in the government's bailout of AIG, selling financials the entire session. Investors flocked to safety bidding up gold $70 an ounce, marking its best one day gain ever.

The Dow Jones Industrial average shed 449 points or 4 percent. All 30 Dow components finished lower. AIG weighed on the average most, falling 45 percent despite the Treasury taking an 80 percent stake in the company as it supplies $85 billion to the insurance company.

The S&P 500 fell 57 points or 4.7 percent. The index is down 7.6 percent for the week and on pace for its worst one week decline in roughly six years.

All 10 major economic sectors finished Wednesday lower. Energy posted the smallest loss, down 2.6 percent as rising oil helped mitigate the damage.

Financials were the worst performer, shedding 8.9 percent. Selling was intense with Goldman Sachs and Morgan Stanley down 14 percent and 24 percent, respectively. Morgan Stanley reported earnings Tuesday night that topped analyst estimates by 50 cents a share, yet the stock still sold off as investors look to exit financials with so much uncertainty surrounding the industry.

Tech sold off as well, the Nasdaq Composite fell 109 points or 4.9 percent. Big-cap tech names led the way down with the Nasdaq 100 falling 5.3 percent.

Gold surged, seeing its best one day gain ever as investors sought a safe place for their money. The commodity added $70 an ounce or 11.6 percent, settling at $850.50.

Crude oil rallied on Wednesday, adding $6.01 a barrel to settle at $97.16 on the New York Mercantile Exchange.

Economic news was not pretty either; August new home construction fell 6.5 percent to an annual rate of 895,000, the lowest rate since January 1991. Economists were expecting a 1.6 percent decline. Building permits dropped 8.9 percent to 854,000.

Elsewhere, SanDisk rejected the $26 a share acquisition offer it received from Samsung on Sept. 4.