NEW YORK: Global stocks fell sharply yesterday after a record $61.7 billion quarterly loss at AIG and an $18.3 billion capital request at HSBC slammed world markets, sending the dollar to 3-year highs and investors fleeing to the safety of government debt.
European shares closed down 5 percent after Asian stocks slid about 4 percent. US stocks fell more than 3 percent as the Dow slid under the 7,000 mark for the first time since October 1997 and the S&P 500 was poised to slide below 700.
Global stocks, as measured by MSCI’s all-country world equity index, fell more than 4 percent to almost a six-year low.
About 1 p.m., the Dow Jones Industrial Average was down 239.90 points, or 3.40 percent, at 6,823.03.
US light sweet crude oil fell $4.88 to $39.88 a barrel.
Gold dropped after rising earlier. Heavy losses in equity markets triggered profit-taking after the metal failed to climb further above $1,000 an ounce last week. Spot gold prices fell 60 cents to $943.55 an ounce.