Horror as US markets plummet
Sapa, AFP and Reuters
New York - US stocks plummeted more than five percent on Monday, with the Dow Jones Industrial Average losing 625 points in the wake of Standard & Poor's unprecedented downgrade of the United States.
The Dow was down 5.5% to 10 813.26 in closing trade, its lowest close since last October. It was the steepest one-day drop in point terms since the financial crisis of 2008. The broader S&P 500 fell 6.6% and the tech-heavy Nasdaq dropped 6.9%.
JPMorgan Chase fell 9.4%, while American Express closed the day 8.8% down.
Bank of America plunged an eye-popping 20.3% after it was hit with a $10.5bn lawsuit from insurer AIG over its sales of faulty mortgage-backed securities prior to 2008.
The Brazil stock exchange plunged 8.0% - the largest in South America - at closing Monday, hit hard by steep falls in Europe and the US.
Other world stocks slid to near 11-month lows overshadowing relief that the European Central Bank was buying Italian and Spanish government bonds in the latest move to staunch the eurozone debt crisis.
The price of gold topped $1 700/oz as investors fled to safe-haven assets. The Swiss franc and the yen soared against the dollar and euro. Traders said the European Central Bank bought Spanish and Italian debt early in the European session after it said on Sunday it would “actively implement” its bond-buying program.
That helped lift the euro to a high of $1.4432 earlier. But the ECB purchases did little to alleviate concern the eurozone’s debt crisis is moving into core countries.
South Africa’s index of blue chips, the Top-40, closed 3.13% lower, booking its lowest finish since September 2010. Share prices have not escaped the hammering that has hit other global stock markets as investors spooked by debt worries in Europe and a United States ratings downgrade flee for less risky assets such as gold
Horror? You mean amusement surely? ;)
Tis too serious a problem to be amusing imho. I lost my sense of humour on this one. Why all the powers at be could not see (and plan for) this coming and prepare I can not tell, by it's been coming for a while now.....
this vicious cycle was all started by corporate greed in the US and Europe... and the fact the millions worldwide (incl. SA) are living off credit... the house of cards is finally collapsing...
In truth, it was overpriced at 12,000. And the fall shouldn't affect economies that are in any event struggling.
WHY HORROR?they have been working on this for months...get real
3 months time the effect of this FALL, will be FELT IN SOUTH AFRICA...
I would be afraid... VERY AFRAID!!!!
Creeky is right- SA always lags. And what can be done? Not much! The underlying problem is debt, which has been built up over decades. SAs on budget debt alone, will next year exceed R1300 billion. If we see a collapse of the value of the Rand, what impact do you think it will have on repayment? Devastation!
that's for sure Creeky... be afraid. As we now have to import food to feed everyone it's gonna hurt big time. Our only way out is to increase exports..... which of course required increased production. Instead we have strikes.... and no possibility of increasing production..... things are bad.
looking good in something and having the best but killing yourself to make the payments. Thats inteligence for ya or is it pride
living for the world :)
Well we were all waiting for the other shoe to drop.
What is fascinating is that despite a rapidly rising gold price the rand is losing ground against all currencies. Why is the Reserve Bank allowing this? Perhaps it is just being opportunistic and hoping to boost exports and FDI under cover of a global financial reset thus avoiding political fallout for our embattled president.
What a ride this is going to be.
SA is no longer such a big gold exporter. But SA also enjoys sentiment for socalled emerging countries.Borrow cheaply in first world and invest here at 9%. But it is all very artificial That inflow can be reversed overnight, and that is coming, for sure
Does everyone kinda have that feeling you get, when the 'coaster is being slowly cranked up to the apex and is just about to go over the threshold where gravity will take hold of it?
Good to see the USA/UK getting its just deserts after reducing South Africa to a communist regime being pillaged to the benefit of a government that has no clue of how to run a country.
OH Dear, Mr Obama has been in office for only a short while and just look what he's done to the economy, tut tut.
So now you are going to blame Obama for Bush and his predecessors transgressions? It is really easy to be in charge when times are good. When times are bad you are suddenly a villain.