8 May 2010

US stocks fall on credit crisis fears

5:38 pm on 8 May 2010

Stocks in the United States turned negative on Friday on fears of another credit crisis stemming from Greece's finances.

Major stock indexes finished a volatile session lower by 1% - 2%.

The volume of shares traded was the second highest this year.

The cost of protecting European bank debt against default by Greece has reached levels not seen since the height of 2009's economic crisis.

The Dow Jones industrial average fell 139.89 points, or 1.33%, to end at 10,380.43.

Standard & Poor's 500 Index was down 17.27 points, or 1.53%, to end at 1,110.88. The Nasdaq Composite Index finished 54 points lower, or 2.33%, at 2,265.64.

The Nasdaq fared the worst on Friday as technology stocks led the broad market lower. Apple Inc ended down 4.2% to $US235.86 and Intel Corp dipped 0.9% to $US21.31.

About 17.6 billion shares were traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, compared with

last year's estimated daily average of 9.65 billion.

Other markets also down

The CAC-40 in Paris was down 5%, the FTSE 100 in London shed 3% and the DAX in Frankfurt lost 3.3%.

The Nikkei index in Japan shed 3.1%, having fallen by 4.1% in morning trading.

The Kospi in South Korea dropped by 2.2%, while the Shanghai index fell 1.9%. Shares in Hong Kong, Taiwan and Singapore also fell.

US markets also fell heavily on Thursday, where the Dow Jones slumped 9%, before rallying. The fall may have been exacerbated by erroneous trades.

The Securities & Exchange Commission has held urgent discussions with other regulators to try to shed light on the causes.

The pound also fell sharply against the dollar and the euro on Friday as results came in the general election in Britain.

The pound fell more than 3 cents, or 2.1%, against the dollar, to $1.4633.

Against the euro, it fell by 2.6 cents, or 2.2%, to 1.1478 euros.

Greek deal approved

European leaders met in Brussels on Friday to finalise details of the assistance deal for Greece. The package was approved.

G7 finance ministers are also due to discuss the Greek debt crisis.