US stocks chase European indexes lower - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

US stocks chase European indexes lower

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Specialists Patrick King, left, and Christopher Carella work on the floor of the New York Stock Exchange Tuesday, May 8, 2012. (AP Photo/Richard Drew) Specialists Patrick King, left, and Christopher Carella work on the floor of the New York Stock Exchange Tuesday, May 8, 2012. (AP Photo/Richard Drew)

U.S. stocks and commodities prices plunged early Wednesday on renewed fears that Europe's debt crisis will fracture its economy and drag down global growth.

The Dow Jones industrial average fell as much as 183 points in early trading and is on the verge of its longest slump since August.

Borrowing rates for several European nations climbed ever upward, a sign that bond investors fear more countries might follow Greece into default. Traders trained their eyes on any signal about Europe's progress toward solving its three-year-old debt crisis.

On the third day after weekend elections in Greece and France, U.S. stocks followed European indexes as they careened lower, continuing one of their worst weeks in months. London's FTSE 100 index is down 3 percent this week, its worst performance since November. Stocks in Athens are down 10.3 percent, the most since August.

Traders sold commodities such as energy, copper and silver that are needed to sustain broad growth but are less valuable when the economy is flaccid and demand for them wanes.

Benchmark crude oil, which sold for about $110 per barrel earlier this year, fell below $100 last week and kept sliding. It fell more than 1 percent and traded below $96 on the New York Mercantile Exchange.

Cash flowed into ultra-safe investments such as U.S. Treasurys, pushing the yield on the 10-year note down to 1.80 percent, a seven-month low.

Economic indicators and corporate earnings in the U.S. continue to signal recovery, albeit a choppy one. The government said after trading began that U.S. wholesale stockpiles grew in March at their slowest pace in four months, a sign demand is too weak for companies to ramp up production.

The Dow fell 179 points to 12,753 as of 10:30 a.m. EDT. The Standard & Poor's 500 index dropped 20 to 1,343. The Nasdaq composite average skidded 44 to 2,901.

The trouble began on Sunday, when voters in Greece and France threw out leaders who had imposed tough spending cuts aimed at soothing investors. Those austerity plans also enraged voters, burdening them with smaller pensions, higher retirement ages and cuts to social services.

Greek voters elected a hodgepodge of splinter parties, making it nearly impossible for leaders there to form a government. Some key Greek leaders have publicly rejected the nation's bargain with international lenders: Deep spending cuts in exchange for bailout money to help manage its crippling debt.

Another round of elections in Greece looks likely. Many fear France's new Socialist government will cut its debt too slowly and Frace will fall victim to the region's spreading debt crisis.

Indexes in France, London and Italy fell more than 1 percent. Spain's 10-year borrowing rate leapt to 6.03 percent from 5.70 percent.

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Daniel Wagner can be reached at www.twitter.com/wagnerreports .

Copyright 2012 The Associated Press.

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