Wall Street Tumbles as Stocks Fall Worldwide
Stocks plummeted Tuesday (Feb. 27), hurtling the Dow Jones industrials down more than 500 points before gaining some of the loss back. The Dow finished down 416 points while the Nasdaq index gave away 97 points.
The Associated Press reported that Wall Street joined a global market plunge sparked by growing concerns that the U.S. and Chinese economies are cooling and that equities prices have become overinflated.
A 9% slide in Chinese stocks, which came a day after investors sent Shanghai’s benchmark index to a record high close, set the tone for U.S. trading.
Investors’ confidence was knocked down further by data showing that the economy may be decelerating more than anticipated. A Commerce Department report that orders for durable goods in January dropped by the largest amount in three months exacerbated jitters about the direction of the U.S. economy, which were raised a day earlier when former
On Monday, Federal Reserve Chairman Alan Greenspan said the United States may be headed for a recession.
“It looks more and more like the economy is a slow growth economy,” said Michael Strauss, chief economist at Commonfund. “Moderate economic growth is good — an abrupt stop in economic growth scares people.”
The market had been expecting the government on Wednesday to revise its estimate of fourth-quarter GDP growth down to an annual rate of about 2.3% from an initial forecast of 3.5%, and grew increasingly nervous on Tuesday that the figure could come in even lower.
The housing market, which Wall Street had been hoping had bottomed out, also looked far from recovery after a Standard & Poor’s index indicated that single-family home prices across the nation were flat in December.
A later report from the National Association of Realtors said existing home sales climbed in January by the largest amount in two years, but the data didn’t erase housing-related concerns, as median home prices fell for a sixth straight month.
In addition, a suicide bomber attack on the main U.S. military base in Afghanistan where Vice President Dick Cheney was visiting also rattled the market.