Economic growth is weak around the world, and some economists worry that a second recession may be coming. Later Thursday, investors will turn their attention to the U.S. Labor Department, which will release weekly claims for unemployment benefits. High unemployment is a major reason why growth in the U.S. has stalled and jobs data is carefully monitored for any changes.
Investors also have worries about Europe. Some countries have borrowed so much that they may not be able to repay their bonds, and economic growth there has slowed. Concerns about a possible default by a European country have dominated the market in recent weeks.
European shares opened lower after an initiative unveiled in Paris on Wednesday august 17 2011, to improve Europe’s fiscal picture failed to assuage fears that the continent’s debt crisis was headed to a blowup.
Britain’s FTSE 100 lost 1.1 percent to 5,273.42 and Germany’s DAX fell 1.5 percent to 5,852.32. France’s CAC-40 was down 1.5 percent at 3,206.60. Ahead of the opening bell on Wall Street, Dow Jones industrial futures were down 1 percent to 11,264 and S&P 500 futures slipped 1.2 percent to 1,175.20.
Bank of America Corp. (BAC) and JPMorgan Chase & Co. (JPM) dropped more than 4.6 percent as Sweden’s financial regulator said his country’s lenders must do more to prepare for a worsening in Europe’s debt crisis that could cut off funding. Caterpillar Inc. (CAT) sank 5.6 percent, pacing losses in companies most-tied to economic growth, as jobless claims rose, consumer inflation accelerated more than forecast and the Philadelphia-area manufacturing index fell to the lowest level since March 2009.
The Standard & Poor’s 500 Index slumped 4.1 percent to 1,145.07 at 10:29 a.m. in New York. All 10 groups in the S&P 500 dropped at least 1.8 percent. The Dow Jones Industrial Average fell 438.62 points, or 3.8 percent, to 10,971.59. Treasuries rallied, pushing 10-year yields to a record low. For the latest updates PRESS CTR + D or visit Stock Market news Today
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