US stocks slide on fears of global slowdown
NEW YORK, USA — STOCKS and interest rates tumbled yesterday after signs of a slowing global economy spooked traders.
The Dow Jones industrial average fell about 230 points in late morning trading to drop below 10,000 for the first time since June 10. The Dow and other major indexes each lost more than two per cent.
Stocks began the day by following Asian and European markets lower. Asian markets fell after an index that forecasts economic activity for China was revised lower. And then European indexes fell sharply after Greek workers walked off the job to protest steep budget cuts.
Then, shortly after US 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 as investors sought the safety of Treasurys. The yield on the 10-year note dropped to as low as 2.97 per cent, the first time it has fallen below three per cent 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 2.99 per cent.
Falling yields are a sign that investors are willing to give up potential gains in stocks for more certain, but smaller profits
in bonds.
In late morning trading, the Dow fell 232.09, or 2.3 per cent, to 9,906.43. The Standard & Poor’s 500 index fell 26.66, or 2.5 per cent, to 1,047.91, while the Nasdaq composite index fell 60.71, or 2.7 per cent, to 2,159.94.
Only about 250 stocks rose while about 2,720 stocks fell at the New York Stock Exchange, where volume came to 455 million shares, compared with 296 million shares traded at the same point Monday.
The Russell 2000 index of smaller companies fell 16.87, or 2.6 per cent, to 624.67.
The Shanghai composite index fell 4.3 per cent to a 14-month low. Japan’s Nikkei stock average fell 1.3 per cent. Britain’s FTSE 100 fell 2.6 per cent, Germany’s DAX index dropped three per cent, and France’s CAC-40 fell 3.4 per cent.
