NEW YORK: US and European stocks fell yesterday as persistent credit and global growth concerns slammed equities and led investors to seek the safety of government debt on both sides of the Atlantic.
The decline US assets reduced demand for the dollars to buy them and pushed investors into investments perceived as less risky, such as the yen and government debt.
Crude prices edged higher in thin, seesaw trade. Oil investors made wary by a volatile dollar and an upcoming meeting of the Organization of Petroleum Exporting Countries Sept. 9 that will focus on a recent slide in prices.
The dollar’s intra-day gains on a better-than-expected US existing-home sales report were short lived, even though a recovering or stabilizing US housing market is seen as critical to restoring investor confidence in the US economy. The British pound hit two-year low against the dollar, with stalled UK growth seen as another example of growing economic malaise outside the United States.
US stocks slid almost 2 percent, erasing Friday’s sharp gains, as financial shares slid.
Before 1 p.m., the Dow Jones Industrial Average was down 240.43 points, or 2.07 percent, at 11,387.63. The Standard & Poor’s 500 Index was down 25.66 points, or 1.99 percent, at 1,266.54. The Nasdaq Composite Index was down 52.02 points, or 2.15 percent, at 2,362.69.
European shares also fell on persistent financial sector worries. The FTSEurofirst 300 index of top European shares ended 0.56 percent lower at 1,169.17 points.
The US dollar pared some losses against the yen after data showed US existing home sales rose more-than-expected in July. The dollar fell against major currencies, with the US Dollar Index down 0.12 percent at 76.684. Against the yen, the dollar fell 0.75 percent at 109.18.
The euro fell 0.06 percent at $1.4782.
The pound later recovered but its weakness helped the revival of the dollar against some currencies including the euro.
The benchmark 10-year US Treasury note rose 24/32 to yield 3.78 percent. The 30-year US Treasury bond rose 39/32 to yield 4.39 percent.
The dollar’s rally sparked a rebound in Asian stocks from a two-year low as the drop in oil prices back below $120 a barrel lifted shares of companies sensitive to energy prices.
US light sweet crude oil rose 29 cents to $114.88 a barrel.
In London, October Brent crude rose 49 cents to $114.41 on the ICE Futures exchange.
