Wednesday, December 14, 2011

Euro zone fears sink global stocks

Stocks fell for a third day and hit their lowest level in two weeks on Wednesday as widespread risk aversion sank commodity prices, drove the euro to its lowest in a year, and pushed Italian bond yields to a record high.

The Dow Jones industrial average dropped 153.22 points, or 1.28 percent, to 11,801.72. The Standard & Poor's 500 Index fell 14.62 points, or 1.19 percent, to 1,211.11. The Nasdaq Composite Index lost 45.11 points, or 1.75 percent, to 2,534.16.

European shares fell to a two-week closing low in thin volume as revived talk of a downgrade of France's sovereign rating added to concerns that the euro zone crisis will curb global growth.

The pan-European FTSEurofirst 300 index of top shares closed 2.1 percent down at 952.42 points, after extending losses in the afternoon on trader talk that France, a key contributor to Europe's rescue fund, is set to lose its triple A rating, a development that could jeopardise the euro zone's efforts to stem its debt crisis.

In Asia, Japan's Nikkei share average also dipped after the Federal Reserve gave no hints of new stimulus measures, but managed to close above key support at its 25-day moving average, raising cautious optimism over the market's outlook.

The benchmark Nikkei ended down 0.4% at 8,519.13, just above its 25-day moving average of 8,503, though it fell below that average earlier in the day. The broader Topix index lost 0.5% to 736.98.