U.S. markets volatile on Japan crisis

Stocks fell sharply Tuesday and bond prices rose as the nuclear crisis in Japan grew following last week's deadly earthquake and tsunami.

The market was down about 297 before the opening bell but began a gradual recovery until it was about 130 points off at midafternoon.

The Dow recovered but still closed down 137.74 points, or 1.1 percent, to 11,855.42. The Standard & Poor's 500 index fell 14.52 points to 1,281.87. All 10 types of companies that make up the index finished lower. The Nasdaq composite index fell 33.64, or 1.2 percent, to 2,667.33.

Investors sold because of the uncertainty about the impact the nuclear crisis would have not only on Japan, but also on companies in this country. Japan is the world's third-largest economy.

Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners, said fear had taken hold in the market. "It's a situation where you sell, and you ask questions later," he said.

Intel Corp., National Semiconductor Corp. and other chip makers were among the biggest losers. Many technology companies are dependent on Japanese factories for their products or components. Insurance companies that do business in Japan, like Aflac Inc., also fell sharply.

The Federal Reserve, which met Tuesday, said in a statement that the economy is on firmer footing. The remark gave stocks some support. But it didn't ease investors' anxiety about Japan.

Only 499 stocks rose on the New York Stock Exchange, while 2,503 fell.

Investors sought the relative safety of U.S. Treasurys, sending prices higher and yields lower. The yield on the 10-year Treasury note dropped to 3.32 percent from 3.36 percent late Monday. Treasury prices soared during stocks' long drop during the financial crisis. They have fallen as stocks recovered, but events like the Japanese quake and tsunami send investors in search of safer places to put their money.

All 10 company groups in the S&P fell Tuesday. Technology stocks fared worst, falling 1.6 percent. Power outages have made it nearly impossible for Japanese factories to produce semiconductors and other electronics, said Kim Caughey Forrest, equity research analyst at Fort Pitt Capital Group.

Intel fell 3 percent, the most of any stock in the Dow average. National Semiconductor also fell 3 percent. Jabil Circuit Inc., which makes parts for electronics and other technology companies, fell less than 1 percent.

Energy stocks also fell as the price of oil dropped below $100 a barrel. Crude was down $2.04 at $99.15 a barrel as analysts anticipated lower demand because of the earthquake. Exxon Mobil Corp. fell about 1 percent.

Among insurers, Aflac was down 6 percent. The health and life insurance company does about 75 percent of its business in Japan, but said it was well prepared to handle claims in the country. Hartford Financial Services Group Inc., which also has operations in Japan, fell 4 percent.