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“This is just sudden and strong confirmation that the economy is not improving,” said Michael Lynch, president of Strategic Energy & Economic Research. “Energy demand is going to be very poor.”

The price of silver fell 9.6 percent. And gold fell 3.7 percent. Earlier this summer, gold set one record high after another. Investors wanted it both as a safe place for their money and to cash in on what seemed an unstoppable run. Gold, which was as high as $1,907 two weeks ago, finished at $1,741.70.

Stocks fell sharply even though the New York Stock Exchange executed a rule designed to smooth trading. The exchange invoked Rule 48, which limits how much information is released about stock trades.

Stock volatility rose anyway. The VIX, an index that measures investor fear, rose about 11 percent to 41.35, double the normal level.

It’s common for stocks to move dramatically after the Fed makes a big announcement. But the number of trades that can be made instantly has also gone up in recent years, causing big swings to happen more quickly. Computer systems are programmed to analyze charts, capitalize on tiny changes in price and execute trades with no human intervention.

“These major moves are much more compressed, time-wise, than in the past,” Landesman said. “A 5 percent move can now happen in a couple of minutes as opposed to a week or two.”

Some analysts called the heavy selling an overreaction.

“The facts show we are not in a recession, and we are not borderline recession,” Chris Rupkey, chief financial economist with Bank of Tokyo-Mitsubishi, wrote in a report Thursday.

The U.S. economy grew at an annual rate of 0.7 percent in the first half of this year, the slowest growth since the end of the Great Recession in June 2009. It would take much healthier growth, 4 or 5 percent, to bring unemployment down significantly.

The government reported Thursday that fewer Americans applied for unemployment benefits last week. But the decline wasn’t nearly enough to raise any real hope that the job market is getting better.

Asian stocks were hammered to start the world’s trading. The Nikkei index in Japan fell 2.1 percent. The main stock averages fell 2.8 percent in China, 2.9 percent in South Korea, 2.6 percent in Australia and almost 5 percent in Hong Kong.

Europe fared even worse. The stock market fell 5.3 percent in France, 5 percent in Germany and 4.7 percent in Britain.

AP economics writers Martin Crutsinger, Christopher S. Rugaber and Paul Wiseman in Washington and AP business writer Matthew Craft and AP energy writer Chris Kahn in New York contributed to this report.