World Stocks Extend Fall on Dismal US Jobs Report

Monday, 04 Jun 2012 07:58 AM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink

World markets dropped on Monday, extending heavy losses last week, as another setback for the U.S. economic recovery intensified fears that a global recession was in the making.

The financial crisis in Europe continued unabated, with uncertainty hanging over Spain's banking sector and Cyprus looking increasingly likely to need a European Union bailout.

Investors were spooked by a U.S. report showing a sharp slowdown in the number of jobs created last month, adding to weak data from other major economies like Europe and Asia.

Unemployment in the 17 countries that use the euro currency stayed at a record-high 11 percent in April. And there were signs that growth in China, which helped sustain the global economy through the 2008-2009 recession, is slowing significantly. China's manufacturing weakened in May, according to surveys released Friday.

"US jobs numbers were not the only weak reading as manufacturing output data in China and the US were also lower, and euro area unemployment reached a record level," Stan Shamu of IG Markets in Melbourne, said in an email.

"There aren't many positives for risk assets at the moment," he said.

Germany's DAX lost 0.9 percent to 5,993 and Switzerland's SMI shed 0.6 percent to 5,741, though France's CAC-40 managed to rise 0.5 percent to 2,968.49. Markets in Britain were closed for a public holiday.

Wall Street was headed for a lower open, with Dow Jones industrial futures shedding 0.6 percent to 12,032 while S&P 500 futures lost 0.5 percent to 1,268.40.

In Spain, investors are waiting for what the government intends to do to boost the finances of some of its ailing banks. The worry is that the government is already strapped for cash and might be overwhelmed by the costs of rescuing its own banks. It might have to tap EU rescue funds, but it is reluctant to do so because such aid would come with conditions on the government's policies.

As worries about Spain's public finances have grown, investors have shied away from lending it money, asking for higher interest rates. Those rates remained high on Monday, at 6.44 percent for 10-year notes, perilously close to the 7 percent that has already pushed Greece, Ireland and Portugal to seek financial aid.

Meanwhile in Cyprus, the central bank governor said the eurozone member is struggling to find €1.8 billion to inject in its second-largest lender, Cyprus Popular Bank, by a June 30 deadline. That means it is increasingly likely to have to accept EU rescue funds. The chairman of Cyprus Popular Bank also suggested an EU loan now seemed more likely.

Markets came under siege earlier during trading in Asia. Japan's Nikkei 224 index dropped 1.7 percent to close at 8,295.63, its lowest finish since Nov. 28, 2011. The broader Topix index ended below the 700 mark for the first time since December 1983, Kyodo News Agency said.

Hong Kong's Hang Seng tumbled 2 percent to 18,185.59. South Korea's Kospi shed 2.8 percent to 1,783.13. Benchmarks in Taiwan and Indonesia fell 3 percent and 4.3 percent, respectively.

Mainland Chinese shares also lost ground, with the benchmark Shanghai Composite Index falling 2.7 percent to 2,308.55. The index's drop of 64.89 points was the biggest this year.

Benchmark oil for July delivery was down $1.30 to $81.94 per barrel, the lowest since October, in electronic trading on the New York Mercantile Exchange. The contract fell $3.30 to settle at $83.23 in New York on Friday.

In currency trading, the euro fell to $1.2420 from $1.2424 late Friday in New York. The dollar fell to 78.03 yen from 78.08 yen.


© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Car in Suspected Threat on Obama Found in Connecticut

Saturday, 30 Aug 2014 16:17 PM

A car sought in connection with a suspected threat against President Barack Obama has been located in Connecticut, autho . . .

Netanyahu: Islamic Extremist Threat All Around Israel

Saturday, 30 Aug 2014 15:45 PM

Israeli Prime Minister Benjamin Netanyahu said threats from the Islamic State and al-Qaida as well as Hezbollah and Iran . . .

Newt: What Would Reagan Do to ISIS?

Saturday, 30 Aug 2014 13:04 PM

Instead of merely criticizing President Barack Obama's lack of an effective national security policy, it might be helpfu . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved