New York, Sep 29 (IANS) US stocks dropped broadly Wednesday, snapping a three-day winning streak as investors’ concerns about the European debt crisis weighed on the markets, Xinhua reported.
News from Europe that the European debt crisis has become the main driving force behind the recent ups and downs in the market has further frayed investors’ fragile nerves.
On Wednesday, Finland’s parliament passed legislation authorizing changes to the eurozone bailout fund, boosting investors’ confidence that the fund would be enlarged to better tackle the debt crisis.
Germany would be the next to vote and the enlargement has to be approved by all the 17 countries of the eurozone.
The European Commission announced Wednesday that a review team from the European Union, the European Central Bank and the International Monetary Fund will return to Greece Thursday to review the country’s compliance with its austerity plan.
Also, eurozone finance ministers would hold an extra meeting in October to discuss the Greek debt issue.
Despite the positive news from the eurozone, it remains unknown whether the Greek debt crisis could be resolved properly, as fundamental disagreements exist among eurozone countries.
The latest US economic data also weighed on the markets. The US Commerce Department said durable goods orders fell slightly by 0.1 percent to $201.8 billion, suggesting business activities were still weak.
The Dow Jones Industrial Average fell sharply by more than 150 points in the last half hour trading, closing at 11,010.90, down 1.61 percent. The S&P 500 index tumbled 2.07 percent to close at 1,151.06, and the Nasdaq Composite Index slid 2.17 percent to close at 2,491.58.
Commodity-related stocks were among the biggest decliners as gold and copper retreated broadly due to economic recession concerns. The energy sector also tumbled as oil prices dipped nearly four percent, pressured by rising crude oil inventories.
Technology sectors’ decline was trimmed by Amazon’s introduction of a new tablet device called Kindle Fire. Amazon surged more than 2 percent.
In currency markets, the US dollar rose against most major currencies on Wednesday, bolstered by risk-averse appetite as investors rushed to seek safe-haven bets. The dollar index gained 0.54 percent to 77.92.
Still to come this week, the final revision of the US second quarter GDP will be released Thursday.
