Stock Markets Go Down, Down… Down
Nothing to see here, move along:
Global share prices crumbled Friday and investor anxiety mounted as political wrangling blocked a deal to save the US finance sector, a big US bank collapsed and a European institution showed signs of stress.
Belgian-Dutch financial group Fortis struggled to dispel liquidity concerns hammering its shares, insisting there was “not a single chance” of failure. The bank announced an emergency asset sale to raise 5.0-10 billion euros (up to 14 billion dollars).
Fortis closed with a loss of nearly 21 percent at 5.18 euros, its lowest reading in 15 years.
Wall Street shares lost ground Friday, with the the Dow Jones Industrial Average down 0.71 percent at 10,943.77 at mid-day. The tech-heavy Nasdaq shed 1.63 percent to reach 2,150.93.
European exchanges also took a pounding. The London FTSE 100 index fell 2.09 percent to close at 5,088.47 points while in Paris the CAC 40 lost 1.50 percent to finish at 4,163.38.
The Frankfurt Dax gave up 1.77 percent to finish at 6,063.50. Asian exchanges earlier in the day also closed in negative territory, with Tokyo shedding 0.94 percent and Hong Kong 1.3 percent
Nathan Topper at Economy.com said: “The markets had known that Washington Mutual was not financially sound, but they were holding out hope that the government would act (on a rescue plan) before regulators had to step in. If factions in Congress and the Bush administration do not agree today on a bank rescue package, markets could sell off further.”
Joshua Raymond, a market strategist at City Index added: “Confidence is swinging like a seesaw at the moment. We can ill afford to drag this out longer than the weekend. It’s increasingly looking like the bailout plan lacks the substance to get through Congress, which would be devastating to markets.”
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