Stocks, metals fall on worries about European debt crisis

— -- Stocks sputtered for the third-consecutive day amid a global sell-off that also knocked down the price of metals from gold to copper.

Mounting fears over the intensifying European debt crisis, and the inability of policymakers to deal with it, has investors scurrying from any assets deemed even a little risky.

The Standard & Poor's 500 lost 13.91 points, or 1.1%, to 1211.82, while the Dow Jones industrial average shed 131.46 points to 11,823.48. The result is a stock market that has fallen 3.5% in three days, is 11% off its high this year and is at its lowest level in two weeks.

"Investors are looking at an awful lot of red," says Ken Winans of money management firm Winans International. "You at least have to say it's a significant downtrend."

Investors are no strangers to sudden sell-offs in stocks this year, yet they are particularly vexed this time with:

•Severe consternation with foreign economies and stocks. The biggest driver behind the downdraft is disappointment with the European Central Bank, says Rod Smyth of Riverfront Investment Group. European officials aren't addressing who will buy Italian and Spanish debt, threatening to drive up interest rates there and making a default more likely, Smyth says. Meanwhile, investors face the reality Europe is unlikely to grow when Asian economies are also weakening, he says.

•A meltdown of precious metal prices. Gold and silver had been defying the stock market's troubles this year. But that changed in a big way Wednesday after gold fell nearly $100 an ounce to $1,565.70, and silver lost more than 8%. Industrial metals, such as copper, suffered, too.

Part of the sell-off in precious metals is due to speculators, who bet European nations would print more currency and spur inflation. They have been wrong so far, Smyth says. Meanwhile, falling prices beget more selling as other investors bail out, he says. Gold is also getting hammered by the fact the dollar is remaining strong, Winans says.

•Movement by industry groups. Energy stocks suffered, with the price of oil dropping 4.2% to $95.96 a barrel. Moves by OPEC to set the supply of oil knocked crude prices down. Concerns about economic growth contributed, too. Meanwhile, investors are rushing to investments that pay a safe yield. The yield on the 30-year Treasury, which moves opposite the price, fell to a record low of 2.9% from 3.01%.

Investors, though, shouldn't let all the losses distract them from what's arguably one of the most attractive stock markets in years, says Robert Maltbie of Singular Research. He says Europe has long been in decline and the recent woes may only steal 1 percentage point from U.S. growth. "Don't worry. It will pass," he says.