26 Aug 2008

Economic jitters send Wall Street into nosedive

8:58 am on 26 August 2008

Wall Street tumbled Monday as fears about the economy intensified after data showing a modest rise in home sales also reflected falling prices and record housing inventories.

At the closing bell, the Dow Jones Industrial Average sank 241.81 points, or 2.08%, to 11,386.25 and the Nasdaq dropped 49.12 points, or 2.03% to 2,365.59.

The Standard & Poor's 500 broad-market index shed 25.35 points, or 1.9%, to a preliminary close of 1,266.85.

Al Goldman at Wachovia Securities said financial shares were pressured by news of Friday's takeover by regulators of Columbian Bank and Trust of Topeka, Kansas, and worries that Lehman Brothers may not be able to get a major investment from South Korea.

A real estate industry group reported sales of existing American homes rose 3.1% in July to a five-month high, somewhat better than expected. But on a 12-month basis, July sales of homes and apartments fell 13.2%, underscoring the deep woes of the real estate market.

European markets down

European shares fell on Monday led by financials amid ongoing worries about the health of the sector and energy majors as crude oil prices extended the previous session's steep slide.

The FTSEurofirst 300 index of top European shares ended 0.56% lower at 1,169.17 points.

In Germany, the DAX index ended at 6296.95 points, down 45.47 or 0.72%, while France's CAC-40 index closed at 4355.87 points, down 44.58 or 1.01%.

The Swiss market index closed at 7062.58 points, down 31.54 or 0.44% and Italy's All Share Mibtel index closed at 21545 points, down 136 or 0.63%.

British financial markets were closed for a bank holiday on Monday. On Friday, the FTSE share index closed 2.5% higher at 5,506.6.