Dow Jones closes 354 pts lower, S&P falls below 1600

The US markets slid after the Federal Reserve chairman Ben Bernanke hinted the central bank may scale back its asset purchases later this year. With the declines from the last two sessions, the Dow and S&P 500 wiped out all of their gains from May and June. The dow is down more than 5 percent since its May closing high.

The Dow Jones industrial average lost 353.87 points, or 2.34 percent, at 14,758.32. The Standard & Poor's 500 Index was down 40.74 points, or 2.50 percent, at 1,588.19. The Nasdaq Composite Index slipped 78.57 points, or 2.28 percent, at 3,364.64.

US treasury yields rallied to new 52-week highs.

On the economic front, jobless claims jumped 18,000 to a seasonally adjusted 3,54,000 last week, according to the labor department. Meanwhile, existing home sale jumped in May to its highest level in 3-1/2 years.

Europe

European markets also saw a sharp selloff, that, despite a better-than-expected advance PMI data. Markit's eurozone flash composite PMI for June rose to 48.9, beating expectations of 48.1. That wasn't much help though - European markets ended the day deep in the red.

Currency

The dollar gained on the prospect of an end to super-easy money from the Federal Reserve. The euro was above 1.32 to the dollar. The dollar index is above 81.50 level. Back home, the rupee ended at an all-time closing low of 59.57 per dollar.

Commodities

Brent crude plummeted to USD 102 per barrel. From precious metals space, gold plunged 5 percent, its lowest level since October, 2010. Silver too slipped 8 percent, below 20 for first time since September 2010.