US, Europe Markets Concern Spreads to Asia

Posted August 5th, 2011 at 7:45 am (UTC-5)
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Asian stock markets dropped sharply Friday, following Thursday’s steep losses in the United States and Europe that were blamed on investors’ fears of another world economic downturn.

Tokyo’s Nikkei index closed down 3.72 percent at its lowest level in five months, and Hong Kong’s Hang Seng plunged more than 4 percent.

Some European markets showed losses of more than 2 percent in early trading Friday, after a drop of nearly four percent Thursday.

The price of gold, a refuge for some investors in uncertain economies, climbed $19.80 to $1,666.32 an ounce.

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

Financial analysts say investors are concerned the U.S. economy could be headed back into a recession. The U.S. government is to report unemployment figures Friday morning that are expected to confirm a weak recovery in the job market.

The U.S. is the world’s largest economy, but investors have voiced little confidence in the country’s sluggish recovery after 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.