Wall Street Plummets
Stocks plummeted Tuesday, hurtling the Dow Jones industrial average down more than 500 points before recovering some ground, as 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 percent slide in Chinese stocks earlier set the tone for U.S. trading, a day after investors sent Shanghai’s benchmark index to a record high close.
Investors’ confidence has been knocked down by a slew of 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 Federal Reserve Chairman Alan Greenspan said the economy 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 percent from an initial forecast of 3.5 percent, and grew increasingly nervous on Tuesday that the figure could come in even lower.
Source: MSNBC.
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