Chinese Internet stocks dive in NY amid bubble concerns

08:34, June 14, 2011      

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Chinese Internet companies were clobbered by investors on Monday at Wall Street, as the majority of U.S.-listed Chinese firms declined in a heavy sell-off amid rising concerns of a possible bubble.

E-Commerce China Dangdang Inc fell 19.3 percent to $10.74, Renren Inc lost 14.4 percent to $8, Inc dropped 14.5 percent to $26.78, and Inc declined 9.52 percent to $45.04. Shares of, and, three top portal sites in China, also dropped.

The Dow Jones industrial average gained 1.06 points, or 0.01 percent, to end at 11,952.97. The Standard & Poor's 500 Index added just 0.85 of a point, or 0.07 percent, to 1,271.83. But the Nasdaq Composite Index dropped 4.04 points, or 0.15 percent, to close at 2,639.69.

Meanwhile, Greece became the lowest-rated country according to rating agency Standard & Poor's, which downgraded it on Monday and issued a stern warning that any attempt to restructure the country's debt would be considered a "default".

S&P's move was the latest blow for Greece's government, which is scrambling to push an austerity package through parliament to ensure continued funding under a year-old bailout plan.

Barely a year after Athens was granted a first 110-billion-euro aid package, the European Union, the IMF and the European Central Bank are working on a second bailout. Some European countries such as Germany oppose giving more money to Greece, without the assistance of private creditors.

S&P said European policymakers looked increasingly likely to impose a restructuring of Greece's debt -- either via a bond swap or by extending bond maturities -- as a means of making the private holders of Greek bonds share the burden.

"In our view, any such transactions would likely be on terms less favorable than the debt being refinanced, which we, in turn, would view as a de facto default according to Standard & Poor's published criteria," the agency said.

In such a case, S&P said, Greece's credit rating would be lowered to "selective default," or SD, while the ratings on the country's debt would be cut to D (default). It cut Greece's long-term sovereign credit rating to CCC, four steps away from default.

By People's Daily Online
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