Stocks Plunge in US, Europe, Asia Amid New Worries of Global Downturn

Posted August 5th, 2011 at 7:05 am (UTC-5)
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Stock markets plunged again Friday, amid new concerns that the world may be headed for another sharp economic downturn.

Key European markets were as much as two percent lower at midday Friday, after falling nearly four percent Thursday.

In Asia, markets fell Friday, with Tokyo's Nikkei closing down 3.72 percent and hitting its lowest level in five months, while Hong Kong's Hang Seng tumbled more than 4 percent.

Meanwhile, gold climbed $19.80 to $1,666.32 an ounce.

In the United States, the Dow Jones Industrial Average suffered its largest drop since October 2008 on Thursday, plummeting 513 points, or 4.3 percent. Other major stock indexes, the NASDAQ and the S&P 500, also fell sharply. The S&P was down four points Friday, indicating a lower opening for U.S. stocks.

Financial analysts say investors are concerned the U.S. economy could be headed back into a recession.

A U.S. report showed new evidence of the country's weak labor market.

A total of 400,000 unemployed workers made their first claims for jobless benefits last week, a figure that was down slightly from the week before. Financial experts say the figure has to drop to below 375,000 and stay there awhile to give U.S. companies enough confidence in the national economy to hire more workers.

On Friday, the U.S. is releasing its monthly unemployment report for July, but experts do not think it will be changed from June's 9.2 percent figure.

The U.S. is the world's largest economy, but investors have voiced little confidence in the country's sluggish recovery. They shrugged off the impact of the agreement this week by U.S. President Barack Obama and Congress to increase the nation's borrowing limit and avoid an unprecedented default on the government's financial obligations.