For the past nine days the markets on Wall Street have been on a steady decline on US Debts crisis, low growth in consumer spending and fears on Greece. On Thursday a chain reaction of news including Jobs expectations and reports from Europe that Italy and Spain may need a bailout. That news sent markets crashing to Earth. The Dow Jones Industrial Average plunges 512 points. From CNBC:
Stocks plunged sharply Thursday, with the Dow down more than 500 points, in its worst one-day drop since December 2008.
All three major averages tumbled into negative territory for the year as investors were rattled over an intensifying global economic slowdown and ahead of the widely-followed monthly unemployment report.
he Dow Jones Industrial Average plummeted 512.76 points, or 4.31 percent, to close at 11,383.68, led by Alcoa [AA 12.94 -1.32 (-9.26%) ] and BofA [BAC 8.83 -0.71 (-7.44%) ]. The last time the Dow dropped more than 500 points in a single session was in Dec. 2008.The S&P 500 sank 60.27 points, or 4.78 percent, to end at 1,200.07.
The Nasdaq plunged 136.68 points, or 5.08 percent, to finish at 2556.39.
The major indexes are firmly in negative territory for the year. In addition, all three averages fell into “correction territory,” defined by a drop of 10 percent from its peak from its intraday high in Apr. 29.
The news from Europe also contribute the slide:
The Bank of England and European Central Bank both left rates unchanged, but it did little to improve investor confidence. The ECB signaled it was buying government bonds in response to a deepening European debt crisis.
Investors were also spooked after ECB President Jean-Claude Trichet said “downside risks may have intensified.”
“It is true that we are experiencing a high level of uncertainty, not just in the euro zone,” he said.
On Friday the European Markets took a dive on news of fall in the US and Asia From Financial Times:
European bourses opened with more heavy losses on Friday as the wave of frantic risk asset selling leaves worldwide stocks recording eight consecutive days of declines on fears over eurozone debt and waning global growth.
The FTSE All-World index is down 1.9 per cent, commodities remain under pressure and short-term US bond yields sit at record lows, reflecting investor’s scramble to raise cash and park it in perceived havens. Gold lurks at $1,658 an ounce, up 0.6 per cent on the day, and just $27 off its record high.
Asian stocks tumbled as fears rose that the global economy may be heading for a recession with the European debt crisis spreading and the US economy slowing. This pushed the FTSE Asia Pacific index down 3.8 per cent, off more than 10 per cent from its May peak.
Japan’s Nikkei 225 Stock Average plunged 3.7 per cent to its lowest levels in more than four months as exporters took a beating. South Korea’s Kospi Composite index also fell 3.7 per cent, plumbing its lowest intraday levels since March. Australia’s S&P/ASX 200 declined 4 per cent to a two-year low as concerns about the global economy pounded resources stocks.
China’s Shanghai Composite index shed 2.2 per cent as commodity producers, property developers and banks slid on fears of a double-dip recession in the global economy. Hong Kong’s Hang Seng lost 5.4 per cent.
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