US Stocks get demolished (ext.)

NEW YORK (CNNMoney) -- Wall Street got socked on Thursday as renewed concerns about the U.S. and global economies sent major indexes plunging and pushed gold to a new high and bond yields to a record low.

Stocks were hit with bad news on multiple fronts. Morgan Stanley put out a dismal forecast for global economic growth. A key reading on U.S. housing came in worse than expected. And a report showed a significant slowdown in the domestic manufacturing sector.

"We had a couple days to stabilize and breathe, but you forget that it's a war zone out there and there's just too much uncertainty about the economy," said Frank Davis, director of sales and trading at LEK Securities.

The Dow Jones industrial average (INDU) dropped 420 points, or 3.7%, to close at 10,991. The blue chips fell as much as 528 points.

The S&P 500 (SPX) lost 53 points, or 4.5%, to 1,141; and the Nasdaq Composite (COMP) lost 131 points, or 5.2%, to 2,380.

At the center of Thursday's sell-off were renewed macroeconomic fears about a possibly slowing global economy.

In a gloomy report from Morgan Stanley, the investment bank slashed its global growth outlook for 2011 and 2012, adding that the U.S. and Europe are "hovering dangerously close to a recession."

"The fact that Morgan Stanley has downgraded its global growth forecast really highlights the concerns and problems facing the global economy," said Michael Hewson, market analyst at CMC Markets in London. "It begs investors to question where future growth will come from."

Morgan Stanley's dire commentary was combined with four disappointing U.S. economic reports out Thursday, with investors putting a great deal of weight on the Philadelphia Federal Reserve's regional manufacturing index.

The closely watched index dropped to a reading of minus 30.7 in July, which indicates severe contraction in economic activity during the prior month. The number was far worse than expected, with economists looking for a reading of plus 0.5.

It was the worst figure for the Philly Fed since March 2009 -- when the U.S. economy was still in recession.

"The Philly Fed data was the punch in the stomach that bent this market over," Davis said.

The greenback gained strength against the euro, Japanese yen and the British pound.

Oil for September delivery fell $5.20, or 6%, to $82.38 a barrel. To top of page