S&P, Nasdaq close at 2010 lows on global slowdown concerns

07:48, June 30, 2010      

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U.S. stocks tumbled on Tuesday, with both the S&P and Nasdaq settling at their lowest levels in 2010, as downbeat economic news made investors worry that the global economic rebound was weakening.

The Dow Jones industrial average ended 268.22 points lower to 9, 908.92, after once tumbling more than 300 points during the session.

The Standard & Poor's 500 index plummeted 33.33 points, or 3.10 percent, to 1,041.24 and the Nasdaq slumped 85.47 points, or 3.85 percent, to 2,135.18. Both indexes were at their lowest closing levels for the year.

Asian and European markets were broadly down, with the Shanghai Composite falling more than 4 percent to the lowest level in 14 months, after the Conference Board, a New York-based research group, revised its leading economic index for China to show the smallest gain in five months in April.

Industrial companies and natural-resource firms were among the hardest hit as investors worried a slowdown in China, one of the main drivers in global economic recovery, will result in the decrease in demand.

Europe was also a major issue. With labor strikes continue in Greece and Spain, more and more people are predicting that neither of the countries will be successful in their austerity measures or cutting their debt enough without some additional aid, which push Credit default swaps spreads in Greece and Spain to their new highs.

Adding to the pressures, U.S. consumer confidence fell sharply in June amid the gloomy labor market. According to another report from the Conference Board, its Consumer Confidence Index dropped to 52.9 in June from 62.7 in May, while economists were expecting the reading to slip to 62.

A separate report showed U.S. home prices rose in April, but failed to provide support for the market. The S&P/Case-Shiller home price index, which measures home prices in 20 large metropolitan areas, rose 0.8 percent, boosted by the expiration of the federal first-time home-buyer tax credit.

Investors fled to safety assets, sending the dollar, gold and Treasuries higher. Yields on two-year Treasury notes fell to the lowest on record on Tuesday.

Source: Xinhua


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