US stocks dive on overseas fears

May 23, 2011

NEW YORK (AFP) – US stocks were sharply lower Monday as investors fretted about heightened European debt woes and global economic growth following manufacturing slowdowns in the eurozone and China.

At around 1530 GMT the Dow Jones Industrial Average of blue-chip stocks was down 144.21 points (1.15 percent) to 12,367.83.

The broader S&P 500-stock index tumbled 16.34 points (1.23 percent) to 1,316.93, while the tech-heavy Nasdaq Composite fell 45.88 points (1.64 percent) to 2,757.44.

The poor opening for the week came after three straight weeks of losses on the markets.

All 30 Dow components were down with Caterpillar losing 3.1 percent and Boeing losing 1.9 percent. The fate of both is closely tied to strong economic growth especially in emerging economies like China.

Among tech stocks, China's Internet giant Baidu lost 3.4 percent.

Shares of the social networking firm LinkedIn, which more than doubled after going public last week at an IPO price of $45, fell 9.4 percent to $84.55.

"Major stock market averages around the world have fallen sharply on Monday in response to a batch of negative headlines focused on foreign concerns," said Patrick O'Hare at Briefing.com.

"In particular, manufacturing surveys for May out of China and the eurozone revealed a slowing in business activity from April; Standard & Poor's cut its debt rating outlook for Italy to negative from stable; and Spain's Socialist Party got clobbered in local elections, raising concerns newly elected officials might discover a worse debt picture than had been previously disclosed," he said.

The bond market rose as the US dollar jumped against the euro. The yield on the 10-year Treasury note slipped to 3.11 percent from 3.15 percent late Thursday, while that on the 30-year bond was at 4.26 percent from 4.30 percent.

Bond prices and yields move in opposite directions.