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Wall Street slides on final day of brutal quarter

Stocks fell sharply again Friday as downbeat foreign economic reports weighed heavily on investors' minds. NBC's Savannah Guthrie reports.

Stocks fell sharply again Friday as downbeat foreign economic reports weighed heavily on investors’ minds.

It has been a brutal week, month and quarter for Wall Street. The Dow Jones industrial average is down about 10 percent for the quarter, the largest drop by percentage since the first quarter of 2009 – and the worst point drop since the final quarter of 2008, the peak of the financial meltdown. This will be the worst third quarter for the Dow since 2002.

The other U.S. indexes have been hit, too. The broader S&P 500 and the tech-heavy Nasdaq will close out their worst quarterly performance in years.

And if you think it’s bad in America, it is even worse in Europe. According to Reuters, the markets in Germany, France and Spain have suffered their largest quarterly loss in nine years.

The Dow fell 240.60 points, or 2.16 percent, to 10,913.38, falling below the 11,000 mark. The S&P fell 28.98 points, or 2.50 percent, to 1,131.42, to 1,131,42. The Nasdaq dropped 65.36 points, or 2.63 percent, to 2,415.40.

Economic data from China and Europe fueled investors’ fears of a continuing global slowdown. Morgan Stanley took a huge hit because of its exposure to European banks.

The Associated Press reports:

All 10 industry groups in the Standard & Poor's 500 index lost ground. Materials, industrials and financial companies each fell more than 2 percent. The broad index dropped 17 points, or 1.5 percent, to 1,143.

The S&P 500 is down 13 percent since July 1, the start of the third quarter. That's the biggest quarterly drop since the three months ended Dec. 31, 2008, when global financial markets seized up. Excluding that period, the S&P has not dropped this much in a quarter for nine years.

"The market has really seen some damage this quarter," said Mike Hurley, portfolio manager of Highland Trend Following Fund.

The weakness appears to be the start of a longer decline, Hurley said, because bonds are gaining value and interest rates are low. Traders also are selling commodities such as oil, which would lose value in an economic downturn as demand for them declines.

"Lower interest rates and commodity prices are definitely an indication that the market thinks economic activity is going to be weak," Hurley said.

Even though American consumers were more upbeat in September and spending was up, the U.S. recovery is still sputtering badly. John Schoen, our senior economic writer, tells you why.

Despite all this doom and gloom, there is at least one investor who is still bullish on America: Warren Buffett.