Alexa
  • Directory of Taiwan

U.S. stocks tumble amid worries over deepening recession

U.S. stocks tumble amid worries over deepening recession

U.S. stocks tumbled in choppy trade to 12-year lows Monday amid worries over a deepening recession and more unsettling news in the financial sector.
The Dow Jones Industrial Average dropped 79.89 points (1.21 percent) to finish at 6,547.05.
The tech-dominated Nasdaq composite slid 25.21 points (1.95 percent) to 1,268.64 and the broad-market Standard & Poor's 500 shed 6.85 points (1.00 percent) at 676.53.
After a rocky opening, the major indices bounced narrowly between positive and negative territory as they headed downward into a late-day sell-off. "Despite a rebound by financial stocks and a batch of merger news, the stock market was unable to put together a sustainable advance," said Briefing.com analysts.
Fred Dickson at DA Davidson said that "the biggest problem remains turmoil in the financial system even after massive multi-trillion U.S. dollar cash injections by the Fed (Federal Reserve) and global banking authorities."
Investment guru Warren Buffett said the economy has "fallen off a cliff" and could take five years to recover, comparing the recession with the devastation of the Pearl Harbor strike that brought the country into World War II.
Negative sentiment gathered momentum over the weekend after the World Bank forecast a global contraction this year for the first time in more than 60 years.
"The World Bank helped fuel the fire, forecasting that the global economy is likely to shrink for the first time since World War II, with global industrial production falling 15 percent by the middle of 2009," said Joseph Hargett at Schaeffer's Investment Research.
News that the British government took a majority stake in Lloyds Banking Group also further undermined confidence in the banking sector.
The market earlier had won support from a sharp rise in New York crude oil prices that later lost momentum. ExxonMobil, the blue-chip Dow's largest component, sharply pared gains to close 0.84 percent higher at US$64.57.
Financial stocks rebounded from punishment in recent days, in particular Bank of America, which soared 19.43 percent to 3.75. JPMorgan Chase erased gains to close 0.19 percent lower at 15.90. Citigroup hovered near the one-dollar mark it breached for the first time last week. Citi rose 1.94 percent to US$1.05.
General Electric, battered in recent days, surged 4.96 percent to 7.41.
The market shrugged off U.S. pharmaceutical giant Merck's announcement of a deal to buy rival Schering-Plough, agreed by both companies' boards. Merck plunged 6.51 percent to 21.26 and Schering-Plough vaulted 15.94 percent to 20.44.


Updated : 2021-08-01 20:10 GMT+08:00