Dow Jones takes a 318 point dive

Trader Gregory Rowe, center, works on the floor of the New York Stock Exchange Friday, Jan. 24, 2014. (AP Photo/Jason DeCrow)
Trader Gregory Rowe, center, works on the floor of the New York Stock Exchange Friday, Jan. 24, 2014. (AP Photo/Jason DeCrow)

NEW YORK (AP) – Fear is back in the market.

Investors are worried about slower economic growth in China, a gloomier outlook for U.S. corporate profits and an end to easy money policies in the United States and Europe. They’re also fretting over country-specific troubles around the world — from economic mismanagement in Argentina to political instability in Turkey.

Those fears converged to start a two-day route in global markets this week, capped by a 270-point drop in the Dow Jones industrial average Friday.

Investors dropped risky stock and currency investments in the developing world and sought refuge in safer ones like bonds, gold and Japanese yen.

The Dow has fallen every day this week, leaving it down 3 percent. That decline is the Dow’s worst weekly performance since mid-May 2012. Meanwhile, the S&P 500 is down 2.4 percent since last Friday. That’s the index’s worst weekly slide since early November 2012.

In Asia, the pain was keenest in Japan Friday, as demand for a safe-haven currency — the yen — surged, dampening prospects for the export-driven Japanese economy. The Nikkei 225 slipped 1.9 percent to close at 15,391.56.

Elsewhere in Asia, Hong Kong’s Hang Seng shed 1.2 percent to 22,450.06 and Seoul’s Kospi dropped 0.4 percent to 1,940.56. Shares in Australia, New Zealand, Singapore, Malaysia, Indonesia and the Philippines sagged.

The turbulence coincides with a global economic shift: China and other emerging market economies appear to be running into trouble just as the developed economies of the United States and Europe finally show signs of renewed strength nearly five years after the end of the Great Recession.

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