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World stocks tumble as Obama targets banks (AP)
LONDON – World markets fell Friday, led by bank stocks after
to avert future financial crises.
or cost taxpayer money in bailouts.
The announcement spooked investors, causing a sell-off in Europe after sharper falls in the U.S. and Asia.
Britain’s FTSE 100 stock index was down 1.0 percent at 5,280.82 and
shed 1.0 percent to 5,691.31.
’s CAC-40 lost 1.0 percent to 3,823.01.
Wall Street fell for a third day on the open, with the
down 0.6 percent at 10,330.18 and the Standard & Poor’s 500 index down 0.5 percent at 1,110.87.
’s recent moves to prevent its economy from overheating amid worries of inflation and asset bubbles.
Bank stocks were hit hardest, with Barclays Plc down 5.8 percent,
3.8 percent and
4.2 percent lower.
Adding to the uncertainty are questions about whether this year’s economic prospects justify more gains after the run-up in stock prices that began in early 2009, said Mark Matthews, strategist at Macquarie Capital Securities in
.
Last year “was such an amazing ride and people are starting to wonder if the recovery that we’re seeing in 2010 was already priced in,” Matthews said.
Upbeat earnings from McDonald’s,
and Kimberly-Clark failed to reassure investors, who moved to cash in on their gains on a 10-month rally in equities.
In Europe, attention remained focused on the debt problems of Greece, with officials stressing the country will not need a bailout but will manage its funding on the market. The possibility that other countries, such as Portugal or
, could also have trouble handling their debt has kept markets on edge, pushing the euro to 5-month lows against the dollar.
The euro recovered somewhat on Friday, to $1.4118 from $1.4082 late Thursday. The dollar weakened to 90.25 yen from 90.49 yen.
In the U.K., officials statistics confirmed that British consumers splurged on food and drink during the holidays, with retail sales rising 3.6 percent in December. The rise, however, was not a strong as some analysts expected, suggesting recovery from recession will be gradual.
In Asia earlier,
led the drop, with the
stock average diving 2.6 percent to 10,590.55.
dropped 0.7 percent to 20,726.18 and Korea’s main market index lost 2.2 percent to 1,684.35.
Elsewhere, China’s Shanghai benchmark fell 1 percent, India’s Sensex shed 1 percent and Australian stocks retreated 1.6 percent.
While banks in the U.S. fell steeply, shares in
performed better, with many closing the session higher. Japanese lender
edged up 0.2 percent and China’s ICBC gained 2.3 percent in
. Other industries like commodities suffered big drops as concerns about future global demand prompted investors to scale back their riskier bets.
edged lower, with benchmark crude for March delivery down 40 cents at $75.68 a barrel. The contract dropped $1.66 to settle at $76.08 overnight.
AP Business Writer Jeremiah Marquez contributed to this report from Hong Kong.