Global stocks slide into the red

BAK · 2008-06-27T04:25:18+00:00

Global stocks slide into the red BBC News Online Wall Street traders are worried about record oil prices Global markets have suffered heavy falls after a raft of bad news including a fresh record for the price of oil. Traders digested news that oil traded at more than $140 a barrel in New York and reacted to signs that the global credit crunch was far from over. In the US, the Dow Jones index fell more than 3% to 11,453.42, its lowest close in nearly two years. European shares fell to their lowest level since October 2005. In the UK, the FTSE 100 index shed 2.6% to close at 5518.2. In Paris, the CAC 40 lost 2.4%, hitting 4,426.19, and Germany's DAX index also lost 2.4% to finish the day at 6,459.60. Soaring oil Analyst said US companies are worried about by the prolonged housing slump, the credit crisis and soaring energy costs. The fear on Wall Street is that rising prices and tighter finances will force Americans to curb spending and push the economy into recession. Some analysts believe a bear market, in which shares fall for a prolonged period, has already taken hold. "Since Bear Stearns went out in March, I think that was the defining moment when everyone said this is a bear market," said Stephen Massocca, analyst at investment bank Pacific Growth Equities. The negative mood was compounded by gloomy outlooks from companies in the US financial, automotive and high-tech sectors. Analysts said traders feared banks and lenders would take longer to recover from the turmoil in the subprime mortgage and credit markets. Citigroup shares fell 6.3%, while Merrill Lynch dropped 6.8%. Meanwhile, a downbeat assessment of how General Motors would weather the economic storm dragged its shares down 10.8% to close at $11.43, the lowest level in more than 33 years. Technology stocks plunged too after industry bellwethers Oracle and BlackBerry maker, Research In Motion, said the outlook was bleak. The technology-heavy Nasdaq index fell 3.3% to close at 2,321.37. But traders largely ignored good news about US house sales. A report from the National Association of Realtors said existing home sales edged up last month, the second increase in the past 10 months. Analysts said markets took little notice of the US Federal Reserve's decision on Wednesday to leave interest rates unchanged.

Thread starter BAK
Start date Jun 27, 2008

BAK

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Global stocks slide into the red

BAK

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