Foreign Stock Drop Sends Dow Into 268 Point Slide
February 5, 2010
(ChattahBox)—For the first time since November, the Dow Jones industrial average fell below 10,000 on Thursday, and ended the day with a decline of 268.37 points to 10,002.18. The slide was due to a rout in European markets, which spread to Asia before hitting Wall Street. With struggling foreign markets that use the Euro, including Greece and Portugal vainly trying to emerge from a lingering global recession, the aftershocks are about to affect the entire global market, including Wall Street.
According to a report by The New York Times on the uncertainty in some global markets, struggling to pay off massive debt, fearful investors are concerned that the foreign market slide may affect stronger economies, such as Spain, France, Germany. And there is talk of wealthier European countries bailing out the poorer ones to avoid another global economic meltdown:
“Fearful investors have started asking whether France, Germany and other rich countries should be forced to bail out their poorer cousins, or simply allow them to default — an outcome that would have major repercussions for Europe and financial markets worldwide.”
The current market route began in Greece, due to its huge debt load. “Greece has acknowledged its budget deficit stands at nearly 13 percent of gross domestic product, while debt levels are among the highest in the European Union — well beyond what the rules of euro membership allow.”
David Riedel, founder of Riedel Research, which provides market analysis, said “There is a realization that the economy is still on very fragile footing globally.” “There are definitely another couple of shoes to drop here with the European crisis.”
See The New York Times for more.