Dow drops 280, barely in black for ’15
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Oil was one of the big stories of the fourth quarter on Wall Street. Now it's turning into one of the big stories of second quarter, for the complete opposite reason, USA TODAY’s David Craig reports.
Stocks took a pounding Friday as the Greece financial crisis re-entered investors’ radar and Asian markets recoiled from a regulatory move in China.
The Dow Jones industrial average ended down 1.5%, or 280 points. The blue-chip index had earlier dropped more than 300 points to dip into the red for 2015 but is now barely in the back for the calendar year.
The Nasdaq composite finished down 1.5% and the S&P 500 closed 1.1% lower.
Europe markets saw steep declines on Greece jitters, with Germany’s DAX tumbling 2.6% — 310 points. France’s CAC 40 sank 1.6%, while the FTSE in Britain finished down 0.9%. The Stoxx Europe 600 index, a continent-wide gauge, fell 1.8%.
AMERICA’S MARKETS: Greece fears return as bills come due soon
Greece isn’t winning much sympathy from its debt-wracked European counterparts as the country draws closer to default for failing to make bailout repayments.
“We are not sympathetic to Greece,” French Finance Minister Michael Sapin said in an interview at the International Monetary Fund-World Bank spring meetings in Washington.
Futures markets in Asia plummeted after Chinese regulators announced a ban on the use of certain types of equities financing The announcement from the China Securities Regulatory Commission came after the close of markets in Asia. The agencymoved to clamp down on the margin trading businesses of financial brokerages that use so-called umbrella trusts, Bloomberg reported.
On the domestic front, rising gas prices spurred a slight, 0.2% increase in inflation in March. That matched the rate of the previous month, Labor department figures show.
Consumer confidence in April hit the second-highest level in more than eight years, Bloomberg reports, citing the University of Michigan gauge of Americans’ views on the economy.
In U.S. corporate news:
■ Dow component American Express is off 4.5%, a big drag on the blue chips. AXP said Thursday its operations were buffeted by the impact of a stronger U.S. dollar on international operations.
■ Oil giant Schlumberger gained after announcing it’s slashing another 11,000 jobs. SLB is up more than 1%.
■ General Electric reported a first-quarter loss of $ 13.6 billion one week following the announcement it would dismantle most of its GE Capital financing operations. GE shares are down slightly.
In China, the umbrella trusts allow traders to secure more financing for stock purchases than ordinarily permitted by regulators. At the same time, the Securities Association of China said fund managers can lend shares for short selling. Chinese stock futures fell 5% on the announcement.
The decision to ban highly leveraged stock purchases comes as stock markets in China have been trading at multi-year highs and amid rising fears of a market bubble. The Shanghai Composite is up 30% since the start of the year. On Friday, the index added another 2% to 4, 287.30.
Adding to a confused market backdrop on Friday, Bloomberg’s trading terminals — used by most of the world’s biggest financial firms to assess data — suffered apparent technical problems that led to a two-and-a-half-hour outage. The disruption caused the British government to delay a $ 4.4 billion debt issue. Several smaller bond auctions were also apparently delayed.
“Significant but not all parts of our network experienced a disruption today. We have restored service to most customers and are making progress in bringing all parts of the network back online. We apologize to our customers,” Bloomberg said in a statement.
Contributing: Edward C. Baig, Kim Hjelmgaard.
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