Stocks dive on financial fears
03-03-2009
Global stocks have plumbed new multi-year lows after insurer AIG's record US$61.7 billion quarterly loss and a $17.7 billion capital request by HSBC slammed financial markets. Insurer American International Group's quarterly loss, the largest in US corporate history, heightened worries about the health of the global financial system and boosted the appeal of government debt and the US dolllar as low-risk havens. The latest news on AIG, which lost a total of $99.29 billion last year, unnerved investors who have been seeking assurances that the credit crisis that began in mid-2007 is finally abating. The decision by HSBC, Europe's biggest bank, to raise funds via a rights issue to help it overcome big losses contributed to fears that the downward trend is picking up pace. European shares closed down 5 percent and Asian stocks fell about 4 percent. US stocks fell 4 percent or more as the Dow closed under the 7,000 mark for the the first time since May 1997. The Dow Jones industrial average closed down 299.64 points, or 4.24 percent, at 6,763.29. The Standard & Poor's 500 Index fell 34.27 points, or 4.66 percent, at 700.82. The Nasdaq Composite Index slid 54.99 points, or 3.99 percent, at 1,322.85. Energy stocks fell after crude prices tumbled 10 percent to settle just above $40 a barrel. US crude settled down $4.61 to $40.15 a barrel. The US dollar rose against a basket of major currencies. Gold dropped after rising earlier. Heavy losses in equity markets triggered profit-taking after the metal failed to climb further above $1,000 an ounce last week. US gold futures for April delivery settled down $2.50 at $940.00 an ounce in New York.
