* Japan's nuclear crisis hits financial markets
* General Electric, AIG slump
* Indexes down: S&P 1.6 pct, Dow 1.6 pct, Nasdaq 1.7 pct
* For up-to-the-minute market news see []
(Updates to early afternoon)
By Caroline Valetkevitch
NEW YORK, March 15 (Reuters) - U.S. stocks tumbled on
Tuesday in a global selloff as fears that Japan's nuclear power
crisis could turn into a larger catastrophe sent investors in
search of safety.
In a second straight day of losses tied to Japan, the S&P
500 fell to within four points of support at 1,257, which was
its 2010 closing level. The U.S. benchmark index began trading
down more than 2 percent and the Nasdaq composite index briefly
turned negative for the year.
"There's a lot more downside before I think we can expect a
bottom, probably another 20 percent downside," said Tim
Hartzell, who oversees $300 million as chief investment officer
for the Houston-based Sequent Asset Management.
"That's when we'll start to look to buy," said Hartzell,
whose firm invests in Japanese stocks through exchange-traded
funds, including the iShares MSCI Japan Index <EWJ.P>.
That ETF was down 1.8 percent at $9.86 on Tuesday.
The Dow Jones industrial average <> was down 193.79
points, or 1.62 percent, at 11,799.37. The Standard & Poor's
500 Index <.SPX> was down 20.56 points, or 1.59 percent, at
1,275.83. The Nasdaq Composite Index <> was down 44.92
points, or 1.66 percent, at 2,656.05.
A Japanese nuclear power plant sent low levels of radiation
toward Tokyo, prompting people to flee the capital. Officials
and markets were still trying to assess the full extent of
destruction from Japan's earthquake and tsunami, with at least
10,000 people feared dead. For details, see []
At its session low, the S&P 500 had given back more than
half the gains of the latest leg of the stock market rally,
from Dec. 1 to the year's high on Feb. 18.
In a sign of investor anxiety, the CBOE VIX volatility
index <.VIX> was up 13.7 percent.
Similarly, option traders exchanged about 2.49 million
contracts in the SPDR S&P 500 fund <SPY.P> by midday as puts
outpaced calls by a factor of 2.10:1, according to options
analytics firm Trade Alert.
Government bonds and other safe-haven assets, such as the
Swiss franc <CHF=EBS>, rose.
At the same time, dollar-denominated Nikkei futures <NKc1>
fell 5.9 percent and are now down 14.4 percent for the year.
Some analysts see further downside ahead for securities
related to Japan.
The S&P 500 is down about 4 percent since the start of the
month after having rallied from early September. It is still up
21 percent since September.
Among U.S. stocks affected by Japan, insurer American
International Group Inc <AIG.N> slid 2.8 percent at $36.46,
while aluminum producer Alcoa Inc <AA.N> lost 2 percent at
$15.80.
Shares of General Electric Co <GE.N>, which has combined
nuclear ventures with Japan's Hitachi Ltd <6501.T>, dropped 3.4
percent to $19.24.
In light of what could be the worst nuclear crisis since
the Chernobyl disaster in 1986, investors questioned the
nuclear industry's prospects as shares in the sector slid. The
Global X Uranium exchange traded fund <URA.N> fell 13.5 percent
to $13.60.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic - S&P 500 and nuclear crises
http://r.reuters.com/deq58r
Breakingviews: Global investors vulnerable as Japan fears
worsen []
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Caroline Valetkevitch; Additional reporting by
Doris Frankel, Rodrigo Campos and Ryan Vlastelica; Editing by
Kenneth Barry)
