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Global stocks dive on poor economic data, recession fears

US, Asian and European markets suffered through another hard day as fears of US economic stagnation and concerns about European banks spooked investors.

Image: Koji Sasahara/AP/Press Association Images

US STOCK MARKETS are having another tough day as new economic data did not match expectations and fears that the country could dip into another recession mount.

Although some losses have already been gained back, stocks are still sharply lower across all indexes.

The Dow Jones dropped more than 500 points after opening as investors’ worries about the global economic recovery heightened.

The index has since climbed back slightly but is still 445 points lower. The S&P500 is over 4.5 per cent lower at 1,140. The Nasdaq has also lost more than 4.8 per cent, or 121 points, to drop to 2,390.

According to the Wall Street Journal, European banks led the declines on stock markets today as Wall Street reacted to media reports that US regulators would be keeping a closer eye on them as fears grow that the eurozone debt crisis could spill over into America.

Dismal factory activity figures from the Mid-Atlantic region in America also had a negative impact on stocks, said Reuters. Output levels in the area are back to March 2009 levels this month, according to the latest data.

Gold continues its bull run, hitting another record high of about US$1,819 per ounce. Investors continue to turn to the precious metal as a safety blanket for their money. Government bonds and the dollar also gained.

Asian and European markets were also lower on close today. Dublin’s ISEQ was down 111.58 points to 2,454.64.

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London’s FTSE100 dropped almost 4.5 per cent to 5,092.

Japan’s Nikkei Stock Index closed at a five-month low after losing 1.3 per cent, while China’s Shanghai Composite fell 1.6 per cent.

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