Stocks slide on renewed fears of global slowdown
NEW YORK (AP) – Stocks and interest rates tumbled Tuesday after signs of a slowing global economy spooked traders.The Dow Jones industrial average fell more than 240 points in morning trading to fall below 10,000 for the first time since June 10. The Dow and other major indexes each lost more than 2 percent.Stocks began the day by following Asian and European markets lower. Asian exchanges fell after economic figures in Japan signaled that the nation’s recovery has slowed. And then European indexes fell sharply after Greek workers walked off the job to protest steep budget cuts.Then, shortly after U.S. trading began, the market was hit with news that consumer confidence fell sharply this month because of worries about jobs and the overall economy. The Conference Board’s Consumer Confidence Index fell nearly 10 points to 52.9, down from a revised 62.7 in May. Economists polled by Thomson Reuters had forecast only a modest drop.The index needs to climb above 90 to indicate the economy is on solid footing.Interest rates fell in the bond market with investors seeking the safety of Treasurys. The yield on the 10-year note dropped to as low as 2.97 percent, the first time it has fallen below 3 percent since April 2009. The yield, which is used as a benchmark for many consumer loans and mortgages, bounced off its low and edged up to 2.98 percent.Falling yields are a sign that investors are willing to give up potential gains in stocks for more certain, but smaller profits in bonds.Companies have indicated things are getting better, yet there are few signs they are ready to hire in big numbers. The Labor Department’s monthly employment report due Friday is expected to show the unemployment rate rose 0.1 percent to 9.8 percent in June.In midmorning trading, the Dow fell 241.76, or 2.4 percent, to 9,897.21. The Standard & Poor’s 500 index fell 27.45, or 2.6 percent, to 1,047.12, while the Nasdaq composite index fell 68.34, or 3.1 percent, to 2,152.31.A report that showed home prices rose in April did little to boost trading. The S&P/Case-Shiller home price index 20-city home price index rose 0.8 percent between March and April. The gains, though, are likely being written off because April was the final month when buyers could receive a tax credit. Nearly all housing indicators got a boost in April from the credit, but have since shown a slowdown in the market.Worries about Europe are again rattling the market. The euro, the common currency used by 16 European nations, fell to $1.2156. The currency has been seen as a proxy for confidence in Europe’s economy following Greece’s near bankruptcy and steep budget cuts around the continent to combat rising deficits. World markets have regularly dropped along with the euro in recent months.Greek workers walked off their jobs as part of another nationwide strike to protest the austerity measures the government put in place to try and reduce debt. The austerity measures were a requirement for Greece to receive a bailout from other European Union members and the International Monetary Fund.The new round of protests sparks fresh concerns about how well European countries will be able to stick to austerity plans in the face of public outcry against them. Investors have been worried for months that Europe’s economy would slow and drag down the global economy with it.The Japanese government reported Tuesday that export demand moderated and household spending dropped last month. Unemployment also rose unexpectedly, climbing for the third straight month.Chinese shares tumbled as investors worried that an initial public offering for the Agricultural Bank of China would draw money away from other stocks.About 2,665 stocks fell while only about 200 rose at the New York Stock Exchange, where volume came to 274 million shares, compared with 179 million shares traded at the same point Monday.The Russell 2000 index of smaller companies fell 19.96, or 3.1 percent, to 621.58.The Shanghai composite index fell 4.3 percent to a 14-month low, while Japan’s Nikkei stock average fell 1.3 percent. Britain’s FTSE 100 fell 3.1 percent, Germany’s DAX index dropped 3.3 percent, and France’s CAC-40 fell 3.8 percent.
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