Global stocks fall amid investor fears
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US stocks opened down more than 2 percent on Tuesday and European markets were in the red amid investor fears over the eurozone's sovereign debt crisis and the possibility that the United States is heading toward another recession.
REUTERS - Global stock markets fell on Tuesday on fears of the European debt crisis worsening, while the Swiss franc lost nearly 10 percent against the euro after Switzerland’s central bank sought to slow the safe-haven rush into its currency, worried it could hurt its economy.
Nervous investors channeled cash into less-risky assets as doubts resurfaced over Italy and Greece’s willingness to implement tough budget and debt measures demanded by other euro zone members, while Germany hardened its stand against giving them more aid.
“Europe is where you have to be focused right now, and Europe doesn’t look good,” said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.
Wall Street stocks were down about 1 percent after a three-day holiday weekend, with Friday’s U.S. jobs report, which showed zero net jobs growth, also hurting investor confidence.
The Swiss central bank set a limit of 1.20 francs to the euro in an attempt to keep the currency’s strength from damaging its economy. Global investors have poured money into the Swiss franc seeking a relatively safe asset.
The move led to some selling of gold after it touched a record high above $1,900 an ounce.
U.S. and German government debt, perceived as safer assets along with gold amid the turmoil, rallied and pushed benchmark yields to historic lows.