European, Asian markets fall
LONDON (AP) - January 16, 2008 Investors in Europe and Asia dumped stocks after an overnight
sell-off on Wall Street and on news that Citigroup Inc. had lost
nearly $10 billion in the fourth quarter as it wrote down mountains
of bad mortgage assets - the latest fallout from the credit crisis.
Weak U.S. retail sales figures added to the gloom.
"People are now fully aware that the credit crisis in the U.S.
could be a threat to growth on a global scale," Heino Ruland at
consultancy FrankfurtFinanz said.
The pan-European Dow Jones Stoxx 600 index fell 1.3 percent to
331.5, its lowest level since September 2006, on worries about the
U.S. economy.
The German DAX 30 index fell 1.1 percent to 7,482.44, the French
CAC-40 index declined 0.8 percent to 5,208.4 and Britain's FTSE 100
index dropped below the 6,000 mark for the first time since August.
The index was down 1.1 percent to 5,957.60.
Investors in the microchip sector were also eyeing the latest
news from U.S. chip maker Intel, after the company reported a 51
percent jump in net profit but missed market expectations and also
provided a gloomy forecast for the first quarter.
Shares in German chip maker Infineon Technologies fell 3
percent, while its Franco-Italian competitor STMicroelectronics
fell 2.6 percent.
Shares in mining and oil companies fell as commodity prices
weakened. Mining company Lonmin's shares were down 3.3 percent and
French oil company Total's shares were down 1.7 percent.
Banks, which triggered the sell off last summer, were also hit,
with shares in UBS down 4.3 percent and Credit Suisse shares down
5.9 percent.
Earlier in Hong Kong, the benchmark Hang Seng index sank 5.4
percent - its biggest percentage drop since the Sept. 11, 2001,
terrorist attacks - to 24,450.85. Tokyo's Nikkei 225 index fell 3.4
percent to 13,504.51 points, its lowest in more than two years. The
benchmark Shanghai Composite Index fell 2.8 percent to 5,290.60.
Markets in Australia, India, South Korea, New Zealand and the
Philippines also dropped sharply on uncertainty about the U.S.
economic outlook and the full extent of the subprime mortgage
crisis.
Concerns about the U.S. financial system were also felt in the
currency market, which sent the U.S. dollar below 106 yen, its
lowest in 2½ years.
There is growing concern that the Federal Reserve hasn't done
enough to keep the U.S. economy going. The central bank has lowered
its key interest rate by a full percentage point to 4.25 percent
since early August.
Now many investors and analysts believe the Fed will cut rates
by a half-point at its Jan. 29-30 meeting.
On Tuesday, the Dow Jones industrial average lost 277 points, or
2.2 percent, to 12,501.11. The Dow Jones industrials lost another
50 points to about 12,450 by midday Wednesday.
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Associated Press writers Dikky Sinn in Hong Kong, Yuri Kageyama
in Tokyo, Kelly Olsen in Seoul, Cassie Biggs in Hong Kong and
Elaine Kurtenbach in Shanghai contributed to this story.
