Brexit backlash: Dow falls 430 Points as markets react

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Dow plunges at open, large volume ahead

The Dow Jones Industrial Average dropped more than 430 points on Friday morning as markets around the world reacted to a vote by citizens of the United Kingdom to leave the European Union.

The Dow fell as much as 538.27 points and the S&P 500 dropped as much as 58.49 points in the first minutes of trading.

Blindsided by the winning "Leave" vote, global investors fled the market in search of safe havens such as gold, the Japanese yen, and U.S. Treasuries. As investors scrambled for any port in a storm, the dollar rose by more than 3 percent — the most in one day since 1978 — and gold soared to a two-year high, reaching 1,000 pounds an ounce.

See social media reactions to Dow Jones plunge:

Social Reactions to the Dow plummeting after Brexit
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Social Reactions to the Dow plummeting after Brexit
In two hours the UK economy has lost $350 BILLION. That’s equivalent to 40 years of EU contributions.
Our first task has to be to make sure that the economic uncertainty created by these events does not hurt working families. #BrexitVote
RIP our economy. Thanks you Brits #dowjones #Britain #UK
the #dowjones crashing over #EU is ok with #DumpTrump because he loves debt, and chaos to make a profit #DonTheCon #NeverTrump
2.4% loss in 19 minutes. #DowJones
The single vote that will trigger a global recession #dowjones #AfterBrexit
Think of today when someone tells you we need to privatize social security and tie it to investments. #DowJones #stockmarketcrash
#Brexit With the #dowjones going crazy, wonder if the airlines have dropped their prices to fly to London 😳
Recession not a concern, stagnation is #BrexitVote says Alan Greenspan @CNBC

Read More: U.K. Voters Back 'Brexit,' Will Leave European Union

The Dow Jones fell 500 points before the opening bell, matching last week's numbers when markets were expecting a Leave vote.

"It's going to be ugly," Mike Ellingsen, a trader at U.S. Global Investors Inc in San Antonio, Texas, told Reuters. "Obviously markets were not pricing this in."

Oil prices, which had remained strong for the past few weeks due to global outages, sank by 6 percent but are expected to stabilize. In early trading Friday, West Texas Intermediate crude held at around $47 a barrel.

See social media reactions to Brexit:

Social reactions to 'Brexit'
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Social reactions to 'Brexit'
Anti-establishment, populist, nationalist views leading to #Brexit parallels rise of Sanders & Trump in US & suggests Nov outcome uncertain
Of course Putin is happy about #Brexit. Undermining the integrity and success of the EU is a key project for him.
Conservative supporters of #Brexit completely under-estimate deeply disruptive effect of this vote and real harm to follow
"...and in the end, Britain, which had colonized the world, destroyed itself in fantasies that it was being colonized in turn" — historians.
Sterling gets trashed after #Brexit outcome but (cheeky) British wit shines through #EUref #FX $GBPUSD $EUR
The Brexit Diet: How to Lose Billions of Pounds in Just Minutes
That's enough fun for one evening. #Brexit
I'm so angry. A generation given everything: Free education, golden pensions, social mobility have voted to strip my generation's future.
Time to make a pot of tea and turn the television off for a while! 🙂
Stop the world im getting off LG x
No matter the outcome, #Brexit polls demonstrate how quickly half of any population can be convinced to vote against itself. Quite a lesson.

"The Federal Reserve is prepared to provide dollar liquidity through its existing swap lines with central banks, as necessary, to address pressures in global funding markets, which could have adverse implications for the U.S. economy." the Federal Reserve's Board of Governors said in a statement on Friday morning.

"The United Kingdom and the European Union will remain indispensable partners of the United States even as they begin negotiating their ongoing relationship to ensure continued stability, security, and prosperity for Europe, Great Britain and Northern Ireland, and the world," President Obama said in a statement released by the White House after the vote results were reported.

In Britain, the country's largest banks all took a body blow, with Lloyds and Barclays both down 30 percent.

Federal Reserve Chair Janet Yellen had twice warned that a Brexit "could have consequences in turn for the U.S. economic outlook," and last night's historic vote certainly put an end to any speculation on a pending a rate hike. The Fed had no plans for an emergency meeting in the event of a leave vote, Yellen said this week.

Reuters contributed to this report.

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