28 Nov 2009

Wall Street braces for Dubai debt repercussions

6:41 pm on 28 November 2009

Wall Street is braced for repercussions of the Dubai debt crisis and for looming key economic data.

The Dow Jones Industrial Average edged down 0.9% on the week to 10,309.92, breaking a three-week streak of gains for blue chips.

The technology-heavy Nasdaq composite tumbled 3.5% to 2,138.44.

The city-state of Dubai has announced that its state flagship conglomerate, Dubai World, wants a six-month standstill on $83 billion in debt, sending world markets into a panic over fears of a debt default.

It was the first chance for markets in the US to react to news that Dubai World had asked for more time to repay its debts.

US markets were closed for a holiday on Thursday when other world markets suffered steep losses.

In addition, United States data due out next week includes figures on manufacturing and construction, unemployment and the Federal Reserve's economic outlook.

European shares recover

Earlier, European shares initially fell over concerns about Dubai's financial health, but the BBC reports the main European markets later recovered.

The UK's FTSE 100 index lost 3.2%, its biggest one-day fall since March. Banks were hit particularly hard, the BBC reports.

Share market indices in France and Germany also fell, however European sharemarkets are still trading at their highest levels for over a year.