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| Recession fears unsettle markets |
| Fears of a recession sent US shares reeling again, after weak manufacturing data and a massive loss at investment bank Merrill Lynch unsettled investo
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| UNITED STATES OF AMERICA
, 18-January-2008
2:42:56 AM |
| The benchmark Dow Jones industrial average fell 306.95 points, or 2.46%, to close at 12,159.21.
A survey showed that factory activity in the US mid-Atlantic region slowed to levels that typically signal recession.
Merrill shares dropped 10.2% to $49.45 after the firm reported its biggest quarterly loss in its history.
It made a net loss of $7.8bn (£3.9bn) in the 12 months to the end of December from a net profit of $7.5bn in 2006.
In the final three months of 2007 alone, it chalked up losses of $9.83bn
European falls
"Fear and pessimism is really beginning to dominate Wall Street," said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago.
"More data showed weakness in the economy, and Merrill Lynch took a write-down the size of which, until recently, would have seemed unfathomable."
The Standard & Poor's 500 Index was down 39.95 points, or 2.91%, at 1,333.25, a 15-month low, while the tech-heavy Nasdaq Composite Index was down 47.69 points, or 1.99%, at 2,346.90.
European stock markets also closed lower, though the falls did not match the magnitude of US markets.
The FTSE 100 index was down 0.68% at 5,902.40, while Germany's Dax dropped 0.78% to 7,413.53.
The steep falls came despite hints from Federal Reserve boss Ben Bernanke that more interest rate cuts were in the pipeline to shore up the economy.
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