Hulk Hogan endorses Obama:
Hulk Hogan endorses Obama:
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-Darryl
NEW YORK — Wall Street was expected to plunge at the opening of trading Tuesday, extending its huge losses from last week and taking more cues from heavy selling that has spread throughout the world. Indicators showed the Dow Jones industrial average was set to fall by about 500 points when trading begins.
Fears of a recession in the United States that could pull down the global economy as well have infected markets around the world, and those declines further unnerved U.S. investors who were unable to trade Monday, when Wall Street was closed for Martin Luther King Jr. Day.
Dow Jones industrial average futures fell 476, or 3.93 per cent, to 11,630. Standard & Poor's 500 index futures fell 57.30, or 4.32 per cent, to 1,628.00. Nasdaq 100 index futures dropped 77.00, or 4.16 per cent, to 1,772.50.
In Asia, Japan's Nikkei stock average closed down 5.65 per cent and Hong Kong's Hang Seng index lost 8.65 per cent a day after showing its biggest losses since the Sept. 11, 2001, terrorist attacks.
In late morning trading, Britain's FTSE 100 rose 0.55 per cent, Germany's DAX index fell 0.97 per cent and, France's CAC-40 rose 0.47 per cent.
Some of the more modest moves in major global indexes Tuesday belie the huge drops many saw Monday. Some of the gains came amid speculation that central banks around the world would step in with coordinated interest-rate reductions to help shore up jittery markets.
A big question is whether the Federal Reserve, scheduled to meet next week, will make an emergency interest rate cut before then.
Last week, each of the major U.S. indexes fell more than 4 per cent as investors grew skeptical late in the week that plans by U.S. lawmakers and President Bush to stimulate the U.S. economy will keep the U.S. from tipping into recession. The plan Bush announced Friday, which requires the OK of Congress, outlines $145-billion (U.S.) in tax relief to help spur consumer spending.
Bond prices rose sharply as investors searched for safety amid the global stock pullback. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.51 per cent from 3.63 per cent late Friday.
The dollar was mixed against other major currencies, while gold prices rose.
Market rout continues overseas
TOKYO — Global stock markets extended their shakeout into a second day Tuesday, plunging amid fears that a possible U.S. recession will cause a worldwide economic slowdown.
The dramatic declines in Asia and Europe were expected to spread to Wall Street, where stock index futures were already down sharply hours before the trading day began.
Japan's Nikkei 225 index nose-dived 5.7 per cent — its biggest percentage drop in nearly 10 years — to 12,573.05, a day after falling 3.9 per cent. Australia's benchmark index sank 7.1 per cent, its steepest slide in nearly 20 years. Hong Kong's Hang Seng index, which slumped 5.5 per cent Monday, was down 8.2 per cent in afternoon trading.
In China, the Shanghai Composite index lost 7.2 per cent to close at its lowest level since August.
European shares swung wildly in morning trade on Tuesday and traded 0.8 per cent lower after turning briefly positive on market talk of central bank interest rate cuts.
At mid-morning, the FTSEurofirst 300 index of top European shares was down 0.8 per cent at 1,269.66 points, having fallen as much as 4.4 per cent earlier in the session and then risen almost 0.5 per cent as the rate talk swirled.
"Theres's rumours about concerted rate cuts... they're talking about the Fed, the ECB, the Bank of England and the SNB all cutting rates," a trader said.
Traders in Paris cited market talk of a rate cut of between 75 to 100 basis points from the U.S. Federal Reserve.
Spokespeople at the European Central Bank, Bank of England and Swiss National Bank, contacted by Reuters, would not comment on the rumours cited by traders. No one at the Federal Reserve was immediately available for comment, following Monday's U.S. holiday.
Indian Finance Minister P. Chidambaram urged investors to remain calm after trading in Mumbai was halted for an hour when the stock market there fell 10 per cent within minutes of opening. In volatile afternoon trading, the Sensex was down 6.2 per cent.
"There is no reason at all to allow the worries of the Western world to overwhelm us," Mr. Chidambaram said.
Investors across the region dumped shares in frenetic trading on worries that the U.S. economy, battered by a credit crisis and housing slump, will shrink in coming months, weakening demand for Asian exports.
Markets have been plunging amid pessimism about the ability of American authorities to prevent a recession. The U.S. Federal Reserve has indicated it will lower interest rates further, and President George W. Bush has proposed an economic stimulus package that includes $145-billion (U.S.) in tax cuts, but investors around the world are doubtful that the measures will lift the economy quickly.
"Unless we get some positive 'shock effects,' such as drastic measures from the U.S. government, there is almost no hope for a recovery in stocks," said Koji Takeuchi, senior economist at Mizuho Research Institute in Tokyo.
Oil and gold prices also fell. Light, sweet crude for February delivery fell to $87.72 a barrel on expectations that slower U.S. growth will lead to less demand for crude. Spot gold, which usually benefits from market uncertainty, fell to a two-week low of $855.20 per troy ounce.
U.S. markets were closed Monday for a holiday commemorating civil rights leader Martin Luther King Jr. But Wall Street future prices were down sharply, portending a plunge when trading begins at 9:30 a.m. Eastern time.
Dow Jones industrial average futures were down 621 points, or 5.1 per cent, to 11,485, while Standard & Poor's 500 futures were down 70 points, or 5.3 per cent, at 1,255.
Noritsugu Hirakawa, who monitors stock trading at Okasan Securities Co. in Tokyo, said investors were spooked by the drastic falls on Chinese and Indian markets — the two emerging economies that are viewed as sustaining global growth even as the U.S. economy sputters.
"The end to the slides in Asian stocks is nowhere in sight," he said. "There is even speculation that China may be exposed to the U.S. subprime mortgage crisis."
In Europe on Monday, investors also dumped stocks, sending the Britain's benchmark FTSE-100 down 5.5 per cent and France's CAC-40 Index sliding 6.8 per cent. Germany's blue-chip DAX 30 plunged 7.2 per cent to 6,790.19.
That sell-off continued Tuesday throughout Asia, with benchmark indices in South Korea, Taiwan, Singapore and the Philippines all falling more than 4 per cent. Indonesia's market sank 8.5 per cent.
Asian markets have been in a downward spiral for most of January. Since the start of the year, Japan's Nikkei index has tumbled nearly 18 per cent, while the Hang Seng is down a stunning 21 per cent.
Even the usually upbeat Japanese Economy Minister Hiroko Ota acknowledged that threats were growing.
"We must take the approach of working together with other nations on this," she said on nationally televised news.
With files from Reuters
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