World stocks tumble on avalanche of bad news
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European and US stocks fell sharply after a series of disastrous economic data and fresh concerns over the health of the global banking system was disclosed. Paris lost 4.56% and the Eurostoxx index slumped by 4,68%.
AFP - US stocks fell hard Wednesday on dismal retail sales data and renewed concerns over the health of banks and other companies set to report quarterly results.
The Dow Jones Industrial Average slid 248.42 points or 2.94 percent to end at 8,200.14, off its day's lows, extending a losing streak to a sixth session.
The Nasdaq composite tumbled 56.82 points (3.67 percent) to 1,489.64 and the broad-market Standard & Poor's 500 index fell 29.17 points (3.35 percent) to 842.62.
Market concerns ranged from disappointing retail sales figures that underscored sagging consumer confidence from earnings warnings in the banking sector, including Deutsche Bank, HSBC and Citigroup.
Selling pressure was "led by a solid drop in financials, exacerbated by a larger-than-expected decline in retail sales," said analysts at Charles Schwab & Co.
US retail sales in December plunged 2.7 percent, more than twice market forecasts, as consumers snapped wallets shut amid the deepening recession, government data showed Wednesday.
It was the sixth straight month of falling retail sales amid tight credit, rising unemployment and growing economic worries following prolonged recession in the world's biggest economy.
Financial stocks sparked the sell-off, with Citigroup and Morgan Stanley as well as US listed units of European banks pulled down by market concerns over their earnings potential as the world's biggest economy reeled from prolonged recession.
Confirmation that Citigroup has agreed to sell a controlling interest in Smith Barney to Morgan Stanley also did little to inspire market confidence over the health of the financial sector, experts said.
It was viewed "more as a forced sale" in a bid to boost the bank's capital position, said Patrick O'Hare of Briefing.com.
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