Fear of slowing growth pushes down global markets
As the new trading week begins, Wall Street is a bit on edge as investors decide whether to continue to pull out of stocks and emerging markets and stash money in safer assets like bonds.
They did so at the end of last week because of worries about slower economic growth in China, a gloomier outlook for U.S. corporate profits and an end to easy money policies in the United States and Europe.
A two-day rout in global markets last week was capped by a 318-point drop in the Dow Jones industrial average on Friday. It was the blue-chip index's worst day since last June. The Dow plunged almost 500 points over the two-day stretch.
The S&P 500 index fell 38 points, or 2.1 percent, to 1,790 Friday. The Nasdaq composite fell 90 points, or 2.2 percent, to 4,128.
Despite the sell-off, U.S. stocks remain near all-time highs after surging 30 percent last year.
Asian stocks sink on global economy fears
Asian stock markets were pummeled today by the possibility of slowing growth in China and a further reduction in U.S. central bank stimulus.
Stocks sank as investors sought out havens such as the Japanese yen, which strengthened to a seven week high against the dollar, and gold, which was at its highest in more than two months.
Investors were awaiting a two-day meeting of the U.S. Federal Reserve starting tomorrow, where officials are expected to reduce the central bank's monthly bond buying by another $10 billion to $65 billion. Recent signs of a sustained recovery in the world's biggest economy will play a big role in the decision by Fed officials to scale back stimulus for a second time.
Emerging markets have been propped up for years by investors seeking higher returns using a tide of so-called "easy money" from the Fed and other central banks but now that the end for those policies looks to be near, some investors are fleeing stocks.
The dollar fell against the euro and the yen.
Benchmark crude oil rose nearer to $97 a barrel.
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