NEW YORK--after three days of bad news about the debt crisis of Europe sent Asian and European markets down Monday, it was Wall Street Tower.
The Dow Jones industrial average fell as much as 180 points before paring back some of its losses. An another steep downgrade of the credit rating of the Greece, a warning on the Italy debt and a major defeat of the party in power to the Spain caused new concerns about Europe's debt crisis.
Who sent the euro lower against the dollar. A stronger dollar, it is more expensive for other countries buying US exports, hurt American businesses that sell goods abroad. Fears that Europe's debt problems could degenerate, as they did last year when the Greece fondue, sent stocks plummeting around the world.
The dollar rose by 0.6 per cent against an index of currencies international Monday. The euro dipped briefly its lowest level against the dollar in two months.
The bad news began late Friday, when the rating Fitch devalued the Greece debt agency in addition in undesirable situation. That gave investors more reason to fear that the country will need help more manage debts beyond the prepared package of emergency, he received last year.
Then, Standard & Poor said Saturday that the Italy was in danger of having its rating lowered debt if it could not reduce its borrowings and increase economic growth. The next day, Spain Socialist Party was roundly defeated in local elections, potentially compromising the country's deficit reduction program.
The Dow Jones index fell 130.78 points, or 1.1%, to close at 12,381.26. The standard & poor 500 index fell 15.9 or 1.2%, 1,317.37 all but a handful of stocks in the S & P 500 dropped a. The Nasdaq composite index fell 44.42 or 1.6%, to 2,758.9.
European markets closed also sharply lower. The FTSE 100 index shares British leaders fell by 1.9%. The DAX lost 2 percent Germany. The CAC 40 in France was less than 2 per cent.
While stocks react strongly to newspapers of the weekend, investors do not sell corporate bonds. If they were, it would signal that investors have been growing wary of the risk, said Jack Ablin, Chief Officer at Harris Private Bank investment officer.
"There is a perception in the short term risk, but I do not view as necessarily sustainable," said Ablin.
Still, investors seeking safer assets, performance on the ticket of 10 years of the Treasury Board went as low as 3.10%, its lowest level of the year. Performance is returned up to 3.13% in afternoon trade, slightly under the 3.15 percent that he traded to end Friday. Fall when increase their bond prices.
Some analysts believe that a decline in stocks was late. Markets were pitched in recent weeks, but the Dow Jones index is always up to 7 percent this year. The index made few cases of the revolutions in the Arab world, attempts by China and other emerging markets to slow growth and the nuclear crisis to the Japan. Now that the season of the benefits of U.S. companies is complete, comprehensive news has become the focal point of.
"There is not much good news," said Randy Bateman, President of Huntington Asset Advisors. "Investors need an excuse to withdraw".
Sovereign debt downgrades can shock on world markets, when they are first announced. Recently, debt downgrades had a short-term effect. Moody devalued March 10 Spain debt. The IBEX 35 sunk 1.3% on the news, but recovered its losses within days.
S & P downgraded its debt outlook to the United States April 17 from stable to negative, which means that it might reduce the country debt rating in the future. The warning sent the Dow down 240 points in morning trade but it recovered the next day.
Four stocks fell for each other that is passed to the New York Stock Exchange. Volume was 3.4 billion shares.
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