Global stocks fell sharply and broadly Wednesday amid concerns about the global economic growth. A fresh round of data was attributed to concerns that the U.S economic recovery had already stalled out in the June quarter.
Wednesday witnessed decline in European shares for the second consecutive session, with miners leading the broad-based decline as investors worried about the sustainability of the global economic recovery.
In a statement, the Federal Reserve said that it is expected that the U.S economy will recover little by little in spite of slow pace of economic recovery in the near term.
The Stoxx Europe 600 index lost 0.7% to 258.12; FTSE index dropped 1.3% to 5,306.27; the French CAC-40 index fell 1.2% to 3,686.91.
The Bank of Ireland shares was down 3.1%.
ING Group shares gained 1%. Nestle also advanced 1%.
In the U.S market, stock futures pointed to a dramatic lower on Wednesday opening. Futures on the Dow Jones Industrial Average lost 103 points to 10,515. Nasdaq 100 futures dropped 22.75 points to 1,873.70.
On the Tuesday trading, U.S stocks closed lower as investors weighed the Federal Reserve’s move which uses mortgage-bond proceeds to buy more Treasurys.
U.S. stocks finished lower on Tuesday, though well off their worst levels of the session, as investors weighed the Federal Reserve\'s move to use mortgage-bond proceeds to buy more Treasurys to foster fragile economy.
The world leader in silicon innovation Intel Corp. (NASDAQ: INTC; SEHK: 4335; Euronext: INCO) suffered the losses, its shares fell 4%. Advance Micro Devices Inc. lost 8%. The S&P 500 Index dropped 6.73 points to 1,121.06 while the Nasdaq Composite lost 28.52 points, or 1.2%, to 2,277.17.
U.S stock investors have been flooded in divergent directions by corporate reports that have largely topped profit forecasts.
J.P. Morgan Chase (NYSE: JPM)- one of oldest financial services in the world, global investment banking and securities firm (GS:NYQ), and New York-based financial services Goldman SachsMorgan Stanley (NYSE: MS) cut down their growth forecasts for the second quarter, followed by data indicating a wider U.S trade deficit for June.
Data indicated that China’s industrial output in July slowed to 13.4% growth, 0.3% less than that of June. In contrast to industrial output decline, inflation rose. Data from Japan also disappointed economists, highlighting troubles still facing the economy. Japan’s benchmark wholesale price measure was 0.1% lower in July from a year ago.
The sharp rise of China’s trade surplus was overshadowed by disappointing growth in imports. Despite faster growth expansion than that of U.S and Europe, China’s growth is expected to slow in the last six months of 2010.
Global stocks fell as fears on growth hitting a rough patch