Wednesday, August 3, 2011

US stocks plunge despite debt deal

The US stocks have plunged by over 2 percent.

Source: Press TV

The US stocks have plunged by over two percent, wiping out most of their gains for 2011, despite a deal that has averted a debt default.

The Dow Jones Industrial Average was down 265.72 points (2.19 percent) to 11,866.77 in closing trade, the broader S&P 500 dropped 32.90 points (2.56 percent) to 1,254.04 and the tech-heavy Nasdaq Composite shed 75.37 points (2.75 percent) to 2,669.24, AFP reported on Tuesday.

Tuesday was the eighth straight day down for the US markets, the longest losing streak since October 2008.

The US President Barack Obama's move to sign a deal to end a months-long fight over raising the US debt ceiling failed to impress markets, as traders focused on data that showed US consumer spending had declined in June.

"Weak data intensified worries about the economic recovery, and the passage by Congress of a debt-ceiling plan didn't help," said Scott Marcouiller of Wells Fargo Advisors.

"Some economists said federal spending cutbacks may contribute to a further slowdown in the economy, and the US remains at risk of losing its triple-A credit rating," he added.

Obama in his speech on the debt deal in the White House on Tuesday said “There's already a quiet crisis going on in the lives of a lot of families, in a lot of communities, all across the country.”

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