US markets plummet amid eurozone debt crisis fears
- 20 May 2010
- From the section Business
US stocks have plummeted amid fears of contagion from the eurozone debt crisis and a pending vote on overhauling financial regulation.
The Benchmark Dow Jones industrial average fell by 376 points - its largest one-day drop since February 2009.
All major US markets were down: the S&P 500 and Nasdaq both fell by around 4%.
Earlier, Germany's Dax index fell 2.02%, France's Cac 40 dropped 2.25%, and London's FTSE 100 closed 1.65% lower.
An unexpected rise in US unemployment contributed to the New York stock exchange's decline, as did continued concern about the eurozone debt crisis and the latest protests in Greece.
"A general strike in Greece is adding to jitters and raised concerns of violence similar to what occurred during the last strike in the country early this month," said Wells Fargo equity market strategist Scott Marcouiller.
New figures showed unemployment benefits in the US rose to a three-month high of 471,000 last week. A fall in claimant numbers had been widely anticipated.
Analysts said Wall Street remained gripped by the eurozone debt crisis but other factors also drove the stocks' decline.
Meanwhile, the US Senate voted to end its debate on reforms of the financial system, paving the way for a final vote on new legislation.
President Barack Obama welcomed the move, saying the vote would allow financial reform to protect consumers, the economy and the American people.
But, he added: "This is not a zero-sum game where Wall Street loses and Main Street gains."
His supporters say the reforms would be the most sweeping overhaul of financial regulations since the Great Depression of the 1930s, but the bill's progress had been stalled by some Republican leaders.
The bill's final passage could now come within the next day.
Euro 'in danger'
German Chancellor Angela Merkel had sparked investor fears on Wednesday by warning that the euro was "in danger".
Germany also moved to ban a type of short-selling blamed for creating market instability.
She has called on major economies to agree to tighter financial regulation.
But investors were unimpressed, with some expressing concerns that the persistent debt problems, sparked earlier this year by Greece, could push the global economy into another recession.
"These sovereign debt worries just aren't fading," said IG Index chief market strategist David Jones.
The day had started fairly calmly in Europe before falling strongly in mid-afternoon trade, with just a very slight pick-up before closing.
"Sentiment is awful and confidence has been trashed," said David Buik, markets analyst at BGC Partners.