Worries about US economy drives most stocks down
Tuesday, 10 April 2012 | 14:30
Concerns that the world's powerhouse economies of China and the U.S. are struggling and that Europe's debt crisis isn't over drove most global stocks down on Tuesday.
European indexes were particularly hit as traders got their first opportunity to react to fairly dismal American jobs data after the long Easter weekend.
On Friday, the U.S. announced that the economy added 120,000 jobs in March, half the previous month's gain and the fewest in five months. That sent shares tumbling in the U.S., and European indexes were catching up Tuesday.
Hopes that the U.S. economy is recovering and will lift other economies with it have powered substantial gains in the stock market this year.
But now that recovery looks increasingly uncertain, and China has also revised its growth projections.
Stocks were dropping on the "realization that a few recent pieces of positive economic data was not enough to justify the recent spell of confidence with the current pace of global growth," said Shavaz Dhalla, a trader with Spreadex. "However, the European debt situation should remind investors that the U.S. is not alone in this."
Last week, disappointing Spanish bond auctions raised the possibility that the country might have to seek a bailout, and the yields, or interest rates, on the bonds of other European countries began rising.
Rising yields have been the hallmark of the crisis, eventually pushing three countries — Greece, Ireland and Portugal — to seek rescue loans when they could no longer afford to borrow money from markets to fund their economies.
Amid all those bleak signs, European shares dived Tuesday.
France's CAC-40 dropped 1 percent to 3,287, while the DAX in Germany fell 0.8 percent 6,723. The FTSE index of leading British shares lost 0.8 percent 5,675. The euro was down 0.3 percent to $1.3079.
Wall Street, which was open on Monday, seemed finally ready to brush off last week's figures and looked set to open slightly higher. Dow futures rose 0.2 percent to 12,879, while S&P futures were up the same rate to 1,378.
Concerns about the health of an economic rebound have also been heightened by high energy prices, which many analysts worry are making any recovery harder. Oil prices have retreated off their recent highs, though, and benchmark oil for May delivery shed 32 cents to $102.15.
Earlier in Asia, most markets closed down.
Tokyo's Nikkei 225 index slipped 0.1 percent to 9,538.02 and Hong Kong's Hang Seng fell 1.1 percent to 20,362.22. South Korea's Kospi shed 0.1 percent to 1,994.41.
China's benchmark Shanghai Composite Index, meanwhile, rose 0.9 percent to 2,305.86.
Elsewhere in Asia, the benchmark indexes in Australia, Thailand and India were down. Those of Taiwan, New Zealand, and Singapore were up.
Source: Associated Press