Global Stocks Keep Sliding Amid EU Debt Crisis
Jason Cipriani/CNET
World markets tumbled Friday, extending a wave of selling amid growing fears that Europe's debt crisis could spread and undermine global economic growth.
In early trading in Europe, Britain's FTSE 100 fell 0.7 percent, Germany's DAX index dropped 1 percent, and France's CAC-40 lost 0.8 percent. Stock futures pointed to modest gains on Wall Street following the previous day's big sell-off.
Japan's Nikkei 225 stock average retreated 245.77 points, or 2.5 percent, to 9,784.54, while Australia's S&P/ASX 200 index shed 0.3 percent to 4,305.40. Indonesia's benchmark stock index plunged 3 percent, Singapore fell 1.9 percent and India slid 1.4 percent.
China's stock market in Shanghai bucked the trend, rising 1.1 percent.
Hong Kong and South Korean stock exchanges were closed for a public holiday. Trading in Thailand has been suspended due to political turmoil.
Investors fear debt problems in countries like Greece and Portugal will spill over to other countries in Europe. That could then trigger a cascade of losses for big banks and in turn halt economic recovery in the U.S. and elsewhere.
"The danger is that the fear becomes self-fulfilling and disrupts the real economy and derails what's been a stronger than expected global economic recovery," said David Cohen, an economist with Action Economics in Singapore.
"The 2008 crisis in the U.S. showed how damaging it can be when investors become so fearful of counterparty risk, they simply flee to the safety of Treasurys," he said.
Singapore's DBS bank cut its 2010 economic growth forecast for Europe to 0.6 percent from 1.1 percent.
A stronger yen hammered exporters in Japan, with automakers and tech shares posting big declines. Honda Motor Co. lost 3.6 percent, and Nissan Motor Co. fell 3.9 percent. The euro sank to 109.47 yen at one point overnight to hit its lowest level since late 2001.
Japanese Finance Minister Naoto Kan told reporters Friday that he is closely monitoring currency markets and that excessive appreciation of the yen is undesirable, according to Kyodo news agency.
Thursday in New York, the Dow Jones industrial average plummeted 3.6 percent to 10,068.01 in its biggest point drop since February 2009. The S&P 500 fell 3.9 percent to 1,071.59, and the Nasdaq composite index plunged 4.1 percent to 2,204.01.
Oil prices resumed their swoon as concerns over the European economy had traders bailing out of energy commodities. Benchmark crude for July delivery was down $1.10 at $69.69 in electronic trading on the New York Mercantile Exchange.
In currencies, the dollar rose to 89.86 yen from 89.06 yen late Thursday. The dollar had been trading near 92-yen levels earlier this week. The euro rose to $1.2487 from $1.2465.
AP In early trading in Europe, Britain's FTSE 100 fell 0.7 percent, Germany's DAX index dropped 1 percent, and France's CAC-40 lost 0.8 percent. Stock futures pointed to modest gains on Wall Street following the previous day's big sell-off.
Japan's Nikkei 225 stock average retreated 245.77 points, or 2.5 percent, to 9,784.54, while Australia's S&P/ASX 200 index shed 0.3 percent to 4,305.40. Indonesia's benchmark stock index plunged 3 percent, Singapore fell 1.9 percent and India slid 1.4 percent.
China's stock market in Shanghai bucked the trend, rising 1.1 percent.
Hong Kong and South Korean stock exchanges were closed for a public holiday. Trading in Thailand has been suspended due to political turmoil.
Investors fear debt problems in countries like Greece and Portugal will spill over to other countries in Europe. That could then trigger a cascade of losses for big banks and in turn halt economic recovery in the U.S. and elsewhere.
"The danger is that the fear becomes self-fulfilling and disrupts the real economy and derails what's been a stronger than expected global economic recovery," said David Cohen, an economist with Action Economics in Singapore.
"The 2008 crisis in the U.S. showed how damaging it can be when investors become so fearful of counterparty risk, they simply flee to the safety of Treasurys," he said.
Singapore's DBS bank cut its 2010 economic growth forecast for Europe to 0.6 percent from 1.1 percent.
A stronger yen hammered exporters in Japan, with automakers and tech shares posting big declines. Honda Motor Co. lost 3.6 percent, and Nissan Motor Co. fell 3.9 percent. The euro sank to 109.47 yen at one point overnight to hit its lowest level since late 2001.
Japanese Finance Minister Naoto Kan told reporters Friday that he is closely monitoring currency markets and that excessive appreciation of the yen is undesirable, according to Kyodo news agency.
Thursday in New York, the Dow Jones industrial average plummeted 3.6 percent to 10,068.01 in its biggest point drop since February 2009. The S&P 500 fell 3.9 percent to 1,071.59, and the Nasdaq composite index plunged 4.1 percent to 2,204.01.
Oil prices resumed their swoon as concerns over the European economy had traders bailing out of energy commodities. Benchmark crude for July delivery was down $1.10 at $69.69 in electronic trading on the New York Mercantile Exchange.
In currencies, the dollar rose to 89.86 yen from 89.06 yen late Thursday. The dollar had been trading near 92-yen levels earlier this week. The euro rose to $1.2487 from $1.2465.
Popular on MoneyWatch
- Reverse cell phone lookup service is free and simple
- How to stop the mediocrity pandemic
- Apple's Cook says company doesn't use "tax gimmicks"
- Top five 529 college plans
- LinkedIn: 3 tips for building a better profile
- Top 10 professional life coaching myths
- Amy's Baking Company: Post-meltdown PR campaign
- How to organize your job hunt
I guess it is O.K. as long as the investors like US??
Maitreya says we need to implement sustainable, ethical principles into our living, including our economic system. Justice, through better distribution of essential food/resources so all can at least live on this planet without dying of starvation while we bail out large corporations and banks....this is the first step! Freedom must go hand-in-hand with justice, or right relationship.
Do you think the current ways of our economy - greed and gambling - are really sustainable? Wouldn't you like a world where people are not worrying what happens if they lose employment for a while...where peace comes about through relaxed tensions among nations and more cooperationm globally?
justice4peace.org
-----
Investors are making the decision that markets are overpriced based on conditions.
When Governments start regulating invetments, curbing short selling and other free market limiting tactics, those governments are treating the symptoms. Treating symptoms is what a Government does when it doesn't want to address the core problem, which is government spending.
Until government spending is under control, markets will find a way to properly price economies.
But asking a government to treat the root cause would be like asking a bacteria to apply an antibiotic on itself. Instead, it will apply asprin.