US stocks tumble on Brexit vote; Dow off 2.2%

US stocks tumbled early Friday, with banking equities suffering especially deep losses, joining an international rout after Britain's surprise vote to exit the European Union. The Dow sank more than 500 points shortly after the markets opened at 1330 GMT, but then quickly recovered some of the losses. The selloffs in the US were smaller than in many overseas markets. About 55 minutes into trade, the blue-chip Dow Jones Industrial Average was at 17,607.16, down 404 points, or 2.2 percent. The broad-based S&P 500 slumped 2.4 percent to 2,062.35, while the tech-rich Nasdaq Composite Index sank 2.9 percent to 4,689.72. Large US banks, which have made London their European headquarters, fell on expectations that the Brexit will mean heavy costs to retool their businesses against a backdrop of rising political uncertainty in Europe. Dow members JPMorgan Chase and Goldman Sachs sank a respective 4.4 percent and 5.6 percent. The KBW Nasdaq Bank Index was down 5.3 percent. Industrials were another weak point in the Dow, with Boeing slumping 3.5 percent, Caterpillar 4.2 percent and General Electric 2.9 percent. Analysts described the US investor reaction to the unexpected outcome in Britain as negative and decisive, yet relatively orderly. The US Federal Reserve said it was ready to provide dollar liquidity to other central banks to offset any global market pressures. Other top officials also offered reassurances. "The US equity markets opened normally for trading this morning," said Mary Jo White, chair of the US Securities and Exchange Commission. "We are continuing to closely monitor the markets and have been in regular communication with financial institutions, exchanges, and market utilities, as well as our financial regulatory counterparts." Analysts said the US economy is not as vulnerable as Europe to the economic drag from political turmoil in Europe. Still, some analysts trimmed their forecasts for US growth following Thursday's Brexit vote. "The US economy is not likely to be much affected," said FTN chief economist Chris Low. "If markets continue to plunge, GDP growth could be trimmed by a quarter point, but if cooler heads prevail the damage will be less." "All that can be determined at this juncture is that there is a heightened feeling of uncertainty following the UK vote and a heightened sense of dismay that, for the first time since the financial crisis, a purported 'worst-case scenario' has actually happened," said Briefing.com analyst Patrick O'Hare. "The extreme reactions to the vote speak to the equally high level of complacency in the thought that a worst-case scenario would not happen."