While you were sleeping: UPDATED Dow plunges 255 points, gold rises

The selloff in global stocks selloff intensified as investors sold shares across all sectors and sought safety in government bonds and gold. 

The yield on the 10-year US Treasury note dropped to 1.642% from 1.706% on Wednesday. Gold futures gained 4.5% to $US1247.90 an ounce and the US dollar fell 1% against the yen to ¥112.22.

Gold is at its highest level in a year. Silver and platinum also advanced.

"The safe-haven seekers are moving back," Julius Baer analyst Carsten Menke told Reuters. "We recommend clients add gold to their portfolios as insurance. If things turn out really badly, there will be much more upside."

Hong Kong equity markets had their worst start to a lunar new year since 1994, according to Bloomberg, dropping 3.9%.

Europe and Wall Street followed suit. The Dow Jones Industrial Average declined 254.56 points, or 1.6%, to 15,660.18. The S&P 500 fell 1.2% to 1829.08 and the Nasdaq Composite lost 0.4% to 4266.84.

Meanwhile, US Federal Reserve Chair Janet Yellen told Congress in her second day of testimony that the central bank was considering whether it might use negative interest rates, following the example of central banks elsewhere such as in the euro-zone.

"We had previously considered them and decided that they would not work well to foster accommodation back in 2010," Mrs Yellen said, Bloomberg reported.

"In light of the experience of European countries and others that have gone to negative rates, we're taking a look at them again because we would want to be prepared in the event that we needed to add accommodation."

Boeing drops after inquiry launched
A plunge in Boeing shares, last 11.1% lower, led the Dow lower. Shares of Goldman Sachs and those of JPMorgan Chase followed, last each 4.1% weaker. Bucking the trend, Cisco shares soared 8.8% for the biggest percentage gain among the only two Dow shares that traded higher.

Boeing shares tanked after Bloomberg reported that the US Securities and Exchange Commission is investigating whether the company properly accounted for the costs and expected sales of two of its best-known jetliners.

The probe, which involves a whistleblower's complaint, centres on projections Boeing made about the long-term profitability for the 787 Dreamliner and the 747 jumbo aircraft, according to Bloomberg.

Meanwhile, the US jobs market keeps showing signs of strength. A Labor Department report showed that initial claims for state unemployment benefits fell 16,000 to a seasonally adjusted 269,000 for the week ended February 6.

"The economy might be sailing into a storm, the financial markets say, but if so, the US economy is in a very strong position to weather whatever comes, with the labour market the strongest in decades," Chris Rupkey, chief economist at MUFG Union Bank in New York, told Reuters.

In Europe, the Stoxx 600 Index finished the day with a 2.8% retreat from the previous close, as bank and mining stocks fell again. The UK's FTSE 100 Index dropped 2.4% while Germany's DAX Index slid 2.9%, and France's CAC 40 Index gave up 4.1%.

UPDATED for Wall Street close at 10am NZ time

(BusinessDesk)