News / Economy

Markets Erase Gains, Dow Loses 519 Points

A specialist works at his post on the floor of the New York Stock Exchange, Tuesday, Aug. 9, 2011
A specialist works at his post on the floor of the New York Stock Exchange, Tuesday, Aug. 9, 2011

Multimedia

Stock volatility continued on Wall Street Wednesday as markets turned their attention once more to the weak global economy. After an impressive rally Tuesday, fears about high levels of public debt in the U.S. and Europe have erased all the gains and then some.  There is growing concern that the global economy may be heading toward another painful recession.

Despite the U.S. Federal Reserve's assurances that it will keep interest rates near record lows for the next two years, all the gains made this week evaporated even before the opening bell.

On closer examination, New York trader Keith Bliss says many now see the Fed announcement as an admission that the world's most powerful central bank is out of ammunition.

"The Fed is basically out of bullets.  It's similar to those Hollywood movies where you see the guy fire all his bullets and now the only thing he has left to do is throw his gun," Bliss said.

But Bliss says the slowing U.S. economy is not the only issue roiling the markets.

"And this is how skittish and temperamental the market is. It reacts not only to factual aspects and fundamental aspects, but also rumors.  So there was a rumor that S & P (ratings agency Standard & Poors) was going to downgrade France's debt, there's rumors that there are French and German banks in trouble because they're holding a lot of sovereign debt over in Europe," Bliss said.

Some see the combination of a weak U.S. outlook and the prospects of another debt crisis in Europe as a recipe for a double dip recession.  Financial expert Jon Henes tells VOA even the remedy is fraught with peril.

"We have a debt problem in the United States and we have a debt problem in Europe.  And to get out of a debt problem you have to reduce debt and when you reduce debt you end up having slow economic growth," Henes said.

It is a tough pill to swallow for many Americans, who have seen the financial market's losses eat into their retirement savings.

"To see my 401K (tax-deferred retirement fund) drop 40 percent over the last year or two, even more so in the past couple of days -- that's devastating," one man said.

"We just need to have faith and roll with the punches and do the best we can whatever happens, but it is looking scary," one woman said.

On Wall Street, fear of high risk and heavy losses helped fuel another major sell-off.  Some broad market indices have now fallen more than 20 percent since April. Unless there's a turnaround soon, analysts say the decline could signal the unofficial start of a bear market.

You May Like

Could Nemtsov Threaten Putin in Death as in Life?

Dynamic and debonair opposition leader had supported liberal economic reforms, criticized Russian president's aggression in Ukraine More

Oil Smuggling Highlights Challenges in Shutting Down IS Finances

Pentagon spokesman says Islamic State 'certainly continues to get revenue from the oil industry black market' but that airstrikes have made a dent More

India Focuses on Infrastructure, Investment to Propel Economy

Government expects economy to grow at 8 to 8.5 percent in next fiscal year More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Supreme Court Hears Hijab Discrimination Casei
X
Katherine Gypson
February 25, 2015 11:30 PM
The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video US Supreme Court Hears Hijab Discrimination Case

The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video Falling Gas Prices Hurt Nascent Illinois Hydraulic Fracturing Industry

Falling oil prices are helping consumers purchase cheaper petroleum at the pump. But that’s made hydraulic fracturing or “fracking” less economically viable for the companies in the United States invested in the process. VOA’s Kane Farabaugh reports on one Midwestern town that was hoping to change its fortunes by cashing in on the next big U.S. oil boom.
Video

Video Fighting in Sudan's South Kordofan Fuels Mass Displacement

Heavy fighting in Sudan's South Kordofan state is causing hundreds of thousands to flee into uncertain conditions. Local aid organizations estimate as many as 400,000 civilians have been internally displaced since the conflict began more than three years ago, while another 250,000 have fled across the border to refugee camps in South Sudan. VOA's Adam Bailes reports.
Video

Video Lao Dam Project Runs Into Opposition

A Lao dam project on a section of the Mekong River is drawing opposition from local fishermen, international environmental groups and neighboring countries. VOA's Say Mony visited the region to investigate the concerns. Colin Lovett narrates.
Video

Video A Filmmaker Discovers Her Biracial Identity in "Little White Lie

Lacey Schwartz grew up in an upper middle-class Jewish family, in a town in upstate New York where almost everyone she knew was white. She assumed that she was, as well. Her recent documentary, Little White Lie, tells the story of how she uncovered the secret of her true racial background. VOA’s Carolyn Weaver has more on the film.
Video

Video Deep Under Antarctic Ice Sheet, Life!

With the end of summer in the Southern hemisphere, the Antarctic research season is over. Scientists from Northern Illinois University are back in their laboratory after a 3-month expedition on the Ross Ice Shelf, the world’s largest floating ice sheet. As VOA’s Rosanne Skirble reports, they hope to find clues to explain the dynamics of the rapidly melting ice and its impact on sea level rise.
Video

Video US-Cuba Normalization Talks Resume Friday

Negotiations aimed at normalizing diplomatic relations between the U.S. and Cuba resume Friday. On the table: lifting a half-century trade embargo and easing banking and travel restrictions. There's opposition in Congress, but some analysts say there may be sufficient political and economic incentives in both nations for a potential breakthrough this year. VOA's Mil Arcega reports.
Video

Video Pakistan's Deadline For SIM Registration Has Cellphone Users Scrambling

Pakistani cell phone users have until midnight Thursday to register their SIM cards, or their service will be cut off. While some privacy experts worry about government intrusion, many Pakistanis are just worried about keeping their phone lines open. VOA Deewa reporter Arshad Muhmand has more from Peshawar.
Video

Video Myanmar Warns Factory Workers to End Strikes

Outside Myanmar's main city Yangon, thousands of workers walked off their jobs earlier this month demanding a doubling of their wages, pay raises after a year and input from labor unions on industrial regulations. Since Friday, the standoff has grown more tense as police moved in to disrupt the sit-ins, resulting in clashes that injured people from both sides. VOA correspondent Steve Herman visited industrial zones which have become a focus of Myanmar's fledgling workers rights movement.
Video

Video Oscar Winners Do More Than Thank the Academy

The Academy Awards presentation is Hollywood’s night to reward the best movies from the previous year. It’s typically a lot of glitter, a lot of thank you’s, a lot of speeches. But many of this year’s speeches carried messages beyond the thank you's. VOA’s Carolyn Presutti takes a look.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

World Currencies

EUR
USD
0.8896
JPY
USD
119.26
GBP
USD
0.6475
CAD
USD
1.2451
INR
USD
61.816

Rates may not be current.