Wall St falls on subdued recovery signs
Market watch top headlines
Australian reports
- Aust markets: Stocks end higher on jobs surge
- Aust dollar report: $A reaches four-month high on jobs data
- Aust credit close: Bonds mixed after Japanese auction
World reports
- World commodities: Crude oil prices fall
- World markets: Wall St lower on European debt fears
AAP
2009-11-20
A stronger dollar and more discouraging signs of a subdued US economic recovery triggered a broad sell-off in stocks on Wall Street overnight.
Major indices tumbled more than one per cent on Thursday, including the Dow Jones industrials, which fell about 133 points by midday.
Energy and material stocks showed the biggest losses as a jump in the dollar sent commodity prices tumbling. Meanwhile, an analyst's downgrade of the chip sector pulled technology shares sharply lower.
Analysts said the dollar was the biggest force behind Thursday's trading, as it has been in recent months. A stronger dollar makes commodities more expensive to foreign buyers, and companies that produce the commodities make less money from them.
The stronger dollar also makes US goods and services more expensive, and theoretically harder to sell overseas. And US companies that do business abroad make less money when their earnings are translated from other countries' currencies into dollars.
The latest data on the economy gave investors little incentive to hold stocks.
A private forecast of economic activity rose less than expected in October, signalling slow growth next year. The Conference Board said its index of leading economic indicators, which forecasts activity over the next six months, rose 0.3 per cent last month, less than the 0.5 per cent gain economists anticipated.
The index climbed one per cent in September.
There was also disappointing news on housing. The Mortgage Bankers Association said more than 14 per cent of American homeowners with a mortgage were either behind on their payments or in foreclosure at the end of September.
The industry group's quarterly report fed fears that a nascent recovery in the housing market could be upended by a continuing surge in loan defaults, especially as unemployment keeps rising.
By mid-afternoon, the Dow had fallen 115.86, or 1.11 per cent, to 10,310.45. The Standard & Poor's 500 index lost 17.14, or 1.54 per cent, to 1,092.66, while the Nasdaq composite index declined 40.9, or 1.86 per cent, to 2,152.24.
Bonds rallied as stocks fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.33 per cent from 3.37 per cent late Wednesday.
LONDON - Europe's main stock markets took a hit on Thursday amid renewed concern about the strength of recovery from the worst global economic crisis in decades after some mixed data and forecasts.
The Organisation for Economic Cooperation and Development (OECD) said growth in Europe had returned earlier than expected but warned the recovery would be slow and could be undermined by financial sector instability and unemployment.
The OECD also urged developed nations to keep economic stimulus measures in place, warned governments to tackle mounting debt and said growth was "likely to fluctuate around a modest underlying trend for some time to come."
London's key FTSE 100 index fell 74.43 points, or 1.39 per cent, to 5,267.7.
FRANKFURT - The Dax 30 lost 85.43 points, or 1.48 per cent, to 5,702.18.
PARIS - The CAC 40 fell 67.94 points, or 1.77 per cent, to 3,760.22.
TOKYO - Japanese shares fell, depressed by a weak performance on Wall Street and worries about Mitsubishi UFJ's plans to issue new shares, dealing a blow to domestic financial stocks.
The benchmark Nikkei-225 index dropped 1.32 per cent, or 127.33 points, to 9,549.47.
HONG KONG - Hong Kong shares closed 0.86 per cent lower, falling for a third straight day after a loss on Wall Street.
The benchmark Hang Seng Index fell 197.17 points to 22,643.16.
WELLINGTON - The New Zealand sharemarket rose when other markets faltered and Fisher & Paykel Healthcare's interim result was well received.
The benchmark NZSX-50 index closed up 12.78 points, or 0.41 per cent, at 3141.18. Turnover was worth $NZ53 million ($A42.6 million).
