Global Stocks Fall on Recession Concern; Commodity Producers, Euro Decline
By Joshuah at 22 October, 2008, 3:01 pm
Source: Bloomberg.com
Stocks fell around the world, the euro sank to an almost two-year low against the dollar and commodities retreated as the economic slump deepened and corporate profits declined.Exxon Mobil Corp., BHP Billiton Ltd. and Petroleo Brasileiro SA slid more than 3 percent. Emerging-market stocks lost 8.2 percent and Argentina’s Merval index headed for its worst drop since 1990 after the government’s plan to seize private pension funds undermined investor confidence in developing countries. The pound tumbled to a five-year low after Bank of England Governor Mervyn King said the country probably is in a recession.
“You see the slowdown in companies and economies and this is only the beginning,” Philippe Gijsels, a Brussels-based senior equity strategist at Fortis Global Markets, which has $62 billion under management, said in a Bloomberg Television interview. “You will see a very nasty shakeout.”
The Standard & Poor’s 500 Index fell for a second day, losing 3.1 percent to 925.48 as of 12:58 p.m. in New York. Europe’s Dow Jones Stoxx 600 Index declined 5.1 percent. The MSCI World Index slid 4.9 percent.
The slump in oil, gold and copper prices dragged Brazilian stocks lower, sending the Bovespa Index to a 6.8 percent retreat. The MSCI Emerging Markets Index reached the lowest level since May 2005.
The MSCI Asia Pacific Index decreased 5.4 percent. Mitsubishi UFJ Financial Group Inc. lost 8.8 percent after a newspaper said earnings probably dropped by half.
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