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05-31-2010, 03:21 PM
World markets tumble on Europe, Korea fears
‘It's risk aversion, falling stock markets and a stronger dollar,’ analyst says
By Herbert Lash and Carolyn Cohn
http://msnbcmedia3.msn.com/i/msnbc/Components/Sources/Art/source_Reuters3.gif updated 10:37 a.m. ET, Tues., May 25, 2010
LONDON - Commodity prices and global stocks fell hard Tuesday on heightened worries that euro zone banking troubles could hobble the global recovery and as saber-rattling on the Korean peninsula (http://www.msnbc.msn.com/id/37329506/ns/world_news-asiapacific/?ns=world_news-asiapacific) unnerved investors.
Oil fell below $68 a barrel and industrial metals tumbled as investors fled riskier assets to the safety of the U.S. and Japanese currencies.
The euro fell to an 8 1/2-year low against the yen and neared a 4-year trough versus the dollar after the weekend takeover of a small Spanish savings bank ignited fears the euro zone sovereign debt crisis is spreading.
Asia stocks fell to multi-month lows and European shares hit their lowest level in 10 months, with banks pressured by concerns over the health of the euro zone's financial sector.
Banking shares in Europe fell to a 10-month low.
Geopolitical tensions rose between the two Koreas after North Korean leader Kim Jong-il ordered his military to go on a combat footing, exacerbating an already nervous market.
"It's risk aversion, falling stock markets and a stronger dollar. People are worried the euro zone crisis will spread and derail the global economic recovery," said Carsten Fritsch, analyst at Commerzbank.
Global stocks as measured by MSCI's all-country world index fell 3.1 percent to their lowest since August 2009, while the more volatile emerging stocks index dropped 4.4 percent to 8-month lows.
Wall Street opened sharply lower, with the benchmark S&P 500 Index falling to a fresh 2010 intraday low, and the Chicago Board Options Exchange Volatility index climbing more than 10 percent at the open to 43.15.
Dow drops
Before 10 a.m., the Dow Jones industrial average was down 223.55 points (http://www.msnbc.msn.com/id/37331460/ns/business-stocks_and_economy/?ns=business-stocks_and_economy), or 2.22 percent, at 9,843.02. The Standard & Poor's 500 Index was down 24.60 points, or 2.29 percent, at 1,049.05. The Nasdaq Composite Index was down 58.86 points, or 2.66 percent, at 2,154.69.
U.S. Treasuries climbed on the flight to safety bid.
The benchmark 10-year U.S. Treasury note was up 19/32 in price, pushing its yield down to 3.13 percent, the lowest in over a year.
"We still have all of the euro zone fears, and there are increased tensions between North and South Korea," said Kim Rupert, managing director of global fixed income analysis at Action Economics in San Francisco.
Bank of America Merrill Lynch cut its oil demand growth forecasts for 2010 to 1.5 million barrels per day from 2 mbpd due to anticipated slower global economic growth in the second half of the year.
U.S. light sweet crude oil fell $2.36 to $67.85 per barrel.
The dollar was up against a basket of major currencies, with the U.S. Dollar Index up 1.09 percent at 87.142.
The euro was down 1.00 percent at $1.2227, and against the yen, the dollar was down 0.60 percent at 89.59 yen.
Spot gold prices rose $5.40 to $1,196.90 an ounce.
Asia stocks fell to multi-month lows on fears that Europe's sovereign debt woes will trigger a renewed crisis among regional banks.
MSCI's broad measure of Asia-Pacific shares outside of Japan tumbled 4.4 percent to touch its lowest in 9 months. Japan's Nikkei average fell 3.1 percent to mark a 6-month closing low below a key support level at 9,500.
http://www.msnbc.msn.com/id/37329709/ns/business-world_business/
‘It's risk aversion, falling stock markets and a stronger dollar,’ analyst says
By Herbert Lash and Carolyn Cohn
http://msnbcmedia3.msn.com/i/msnbc/Components/Sources/Art/source_Reuters3.gif updated 10:37 a.m. ET, Tues., May 25, 2010
LONDON - Commodity prices and global stocks fell hard Tuesday on heightened worries that euro zone banking troubles could hobble the global recovery and as saber-rattling on the Korean peninsula (http://www.msnbc.msn.com/id/37329506/ns/world_news-asiapacific/?ns=world_news-asiapacific) unnerved investors.
Oil fell below $68 a barrel and industrial metals tumbled as investors fled riskier assets to the safety of the U.S. and Japanese currencies.
The euro fell to an 8 1/2-year low against the yen and neared a 4-year trough versus the dollar after the weekend takeover of a small Spanish savings bank ignited fears the euro zone sovereign debt crisis is spreading.
Asia stocks fell to multi-month lows and European shares hit their lowest level in 10 months, with banks pressured by concerns over the health of the euro zone's financial sector.
Banking shares in Europe fell to a 10-month low.
Geopolitical tensions rose between the two Koreas after North Korean leader Kim Jong-il ordered his military to go on a combat footing, exacerbating an already nervous market.
"It's risk aversion, falling stock markets and a stronger dollar. People are worried the euro zone crisis will spread and derail the global economic recovery," said Carsten Fritsch, analyst at Commerzbank.
Global stocks as measured by MSCI's all-country world index fell 3.1 percent to their lowest since August 2009, while the more volatile emerging stocks index dropped 4.4 percent to 8-month lows.
Wall Street opened sharply lower, with the benchmark S&P 500 Index falling to a fresh 2010 intraday low, and the Chicago Board Options Exchange Volatility index climbing more than 10 percent at the open to 43.15.
Dow drops
Before 10 a.m., the Dow Jones industrial average was down 223.55 points (http://www.msnbc.msn.com/id/37331460/ns/business-stocks_and_economy/?ns=business-stocks_and_economy), or 2.22 percent, at 9,843.02. The Standard & Poor's 500 Index was down 24.60 points, or 2.29 percent, at 1,049.05. The Nasdaq Composite Index was down 58.86 points, or 2.66 percent, at 2,154.69.
U.S. Treasuries climbed on the flight to safety bid.
The benchmark 10-year U.S. Treasury note was up 19/32 in price, pushing its yield down to 3.13 percent, the lowest in over a year.
"We still have all of the euro zone fears, and there are increased tensions between North and South Korea," said Kim Rupert, managing director of global fixed income analysis at Action Economics in San Francisco.
Bank of America Merrill Lynch cut its oil demand growth forecasts for 2010 to 1.5 million barrels per day from 2 mbpd due to anticipated slower global economic growth in the second half of the year.
U.S. light sweet crude oil fell $2.36 to $67.85 per barrel.
The dollar was up against a basket of major currencies, with the U.S. Dollar Index up 1.09 percent at 87.142.
The euro was down 1.00 percent at $1.2227, and against the yen, the dollar was down 0.60 percent at 89.59 yen.
Spot gold prices rose $5.40 to $1,196.90 an ounce.
Asia stocks fell to multi-month lows on fears that Europe's sovereign debt woes will trigger a renewed crisis among regional banks.
MSCI's broad measure of Asia-Pacific shares outside of Japan tumbled 4.4 percent to touch its lowest in 9 months. Japan's Nikkei average fell 3.1 percent to mark a 6-month closing low below a key support level at 9,500.
http://www.msnbc.msn.com/id/37329709/ns/business-world_business/