US Stocks tumbled Tuesday on worries that the global recovery could suffer if Europe's efforts to contain Greece's debt problems don't succeed, and if China's efforts to slow its booming economy go too far.
Bond prices rallied, lowering the corresponding yields, as investors sought the comparative safety of government debt.
The euro fell to a new yearly low versus the dollar, pummeling dollar-traded energy prices and stocks.
The Dow Jones industrial average (INDU) slumped 225 points, after having fallen as much as 282 points earlier. The decline, equivalent to 2%, was the average's biggest one-day point drop since February 4. The S&P 500 index (SPX) lost 29 points, or 2.4%. The Nasdaq composite (COMP) fell 74 points, or 3%.
Analyst said "We're realizing that Greece's problems are not going to go away and that China has to slow growth down. These issues are giving us a view into our own future if we keep piling up debt. The markets are worried about how the U.S. will balance growth with inflationary risks, and what the impact of the growing deficit will mean. The ongoing impact from the oil spill in the Gulf of Mexico on commodities was also a factor, "
LONDON - European stock markets suffered heavy losses, with London shedding 2.56 per cent on fears that fallout from the Greek debt debacle might undermine other volatile eurozone states.
The London FTSE index of leading shares ended the day down 142.18 points at 5,411.11 points.
FRANKFURT - The DAX 30 closed down 160.06 points, or 2.6 per cent, at 6,006.86 points.
Oil prices tumbled below $US83 a barrel Tuesday on a stronger dollar and a falling stock market as investors worried about the ongoing European financial crisis.
After setting an 18-month high during trading Monday, benchmark crude for June delivery fell $US3.45, or four per cent, to settle at $US82.74 a barrel on the New York Mercantile Exchange.
Australian shares are likely to slump on Wednesday after US and European stocks dropped as fears spread that Europe's attempt to contain Greece's debt crisis would fail.
At 0706 AEST on the Sydney Futures Exchange, the June share price index contract was 102 points lower at 4,642 points.
In economics news on Wednesday, the Australian Bureau of Statistics releases its building approvals data for March. The Australian Industry Group and Commonwealth Bank Australia release the Performance of Services Index (Australian PSI) for April.
GOLD down $14.10 to US$1,169.20 an ounce SILVER down 99.8c to US$ 17.842 an ounce COPPER down .114c at US$3.16 a pound
Skim your profits off the top as the stock climbs. Speculative stocks tend to rise and fall rapidly, so keep your eye out for any activity. Sell your profits and keep the base amount in the stock.
