Rough morning on Wall Street as Spanish banks wobble and news spreads that North Korea is preparing to battle South Korea
By Nathaniel Popper, Los Angeles Times
Reporting from New York --
Stock markets plunged this morning, with fears about the European economy and a Korean military confrontation driving the Dow Jones industrial average below 9,900.
The Dow had fallen 2.2%, or 217.80 points, at midmorning, and other indexes fell even more sharply. The Nasdaq composite index was down 2.37%, or 52.56 points, to 2,160.99.
Fears about the health of the European Union's economy were stoked when four Spanish banks said late Monday they were planning to merge just a few days after the Spanish government bailed out another leading Spanish bank.
The major Spanish index of stocks was down 3.6% on Tuesday, and around the world, shares in financial institutions were among the biggest losers.
The European currency dropped in value against the dollar, after three days of steady gains, falling to $1.22.
"The market is trying to price in the worst-case scenario right now," Art Hogan, chief equities strategist at Jefferies Group Inc. told Bloomberg, with "not only a lending freezing" but also "a major bank becoming insolvent".
Markets also responded to news that North Korea was making preparations for war with South Korea after a confrontation over a torpedoed South Korean warship. The Japanese Nikkei index was down 3.1%. Link
