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World Shares Sharply Lower Wednesday   09/28 05:17

   World shares tumbled Wednesday after a wobbly day on Wall Street as markets 
churned over the prospect of a possible recession.

   TOKYO (AP) -- World shares tumbled Wednesday after a wobbly day on Wall 
Street as markets churned over the prospect of a possible recession.

   U.S. futures and oil prices declined and China's yuan weakened sharply.

   Trading has been volatile since the Dow Jones Industrial Average followed 
other major U.S. indexes into a bear market earlier this week.

   In early trading, Germany's DAX lost 1.3% to 11,983.29 and the FTSE 100 in 
London was also down 1.3%, at 6,895.21. In Paris, the CAC40 gave up 0.9% to 

   The future for the S&P 500 was 0.8% lower and the contract for the Dow 
industrials lost 0.6%.

   China's yuan fell to a 14-year low against the dollar Wednesday despite 
central bank efforts to stem the slide after U.S. interest rate hikes prompted 
traders to convert money into dollars in search of higher returns.

   The yuan fell to 7.2301 to the dollar, its lowest level since January 2008. 
One yuan was worth about 13.8 cents, down 15% from its March high.

   A weaker yuan helps Chinese exporters by making their goods cheaper abroad, 
but it encourages capital to flow out of the economy. That raises costs for 
Chinese borrowers and sets back the ruling Communist Party's efforts to boost 
weak economic growth.

   Chinese shares weakened, with the Shanghai Composite index losing 1.6% to 
3,045.07. The Hang Seng in Hong Kong plunged 3.4% to 17,250.88.

   Elsewhere in Asia, Tokyo's Nikkei 225 index sank 1.5% to 26,173.98 while the 
Kospi in Seoul lost 1.5% to 2,169.29. In Sydney, the S&P/ASX 200 gave up 0.5% 
to 6,462.00.

   The week started off with a broad sell-off that sent the Dow Jones 
Industrial Average into a bear market, joining other major U.S. indexes.

   On Tuesday, the S&P 500 slipped 0.2%, its sixth consecutive loss. The Dow 
fell 0.4% and the Nasdaq composite wound up with a 0.2% gain.

   Small company stocks held up better than the broader market. The Russell 
2000 added 0.4%.

   Major indexes remain in an extended slump on fears that the higher interest 
rates being used to fight inflation could knock economies into recession.

   The S&P 500 is down roughly 8% in September and has been in a bear market 
since June, when it had fallen more than 20% below its all-time high set on 
Jan. 4. The Dow's drop on Monday put it in the same company as the benchmark 
index and the tech-heavy Nasdaq.

   Central banks around the world have been raising interest rates to make 
borrowing more expensive and cool the hottest inflation in decades. The Federal 
Reserve has been particularly aggressive. It raised its benchmark rate, which 
affects many consumer and business loans, again last week. It now sits at a 
range of 3% to 3.25%, but was near zero at the start of the year.

   The Fed also has released a forecast suggesting its benchmark rate could be 
4.4% by the year's end, a full percentage point higher than it envisioned in 

   Wall Street is worried that the Fed will hit the brakes too hard on an 
already slowing economy and veer it into a recession. The higher interest rates 
have been weighing on stocks, especially pricier technology companies, which 
tend to look less attractive to investors as rates rise.

   Investors will be watching the next round of corporate earnings very closely 
to get a better sense of how companies are dealing with inflation. Companies 
will begin reporting their latest quarterly results in early October.

   The government will release its weekly report on unemployment benefits on 
Thursday, along with an updated report on second-quarter gross domestic 
product. On Friday, the government will release another report on personal 
income and spending that will help provide more details on where and how 
inflation is hurting consumer spending.

   In other trading Wednesday, U.S. benchmark crude lost 26 cents to $78.24 per 
barrel in electronic trading on the New York Mercantile Exchange.

   Brent crude, used to price international oils, shed 23 cents to $84.64 per 
barrel in London.

   The dollar fell to 144.71 Japanese yen from 144.81 yen. The euro was at 
95.55 cents, down from 95.92 cents.

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