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

Koreas Mark 61st Anniversary of War Armistice

Muted observances on both sides of heavily-armed Demilitarized Zone that separates two decades-long enemies More

Judge Declares Washington DC Ban on Public Handguns Unconstitutional

Ruling overturns capital city's prohibition on carrying guns in pubic More

Pricey Hepatitis C Drug Draws Criticism

Activists are using the International AIDS Conference to criticize drug companies for charging high prices for life-saving therapies 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.
Students in Business for Themselvesi
X
Mike O'Sullivan
July 26, 2014 11:04 AM
They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Students in Business for Themselves

They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.
Video

Video Not Even Monks Spared From Thailand’s Junta-Backed Morality Push

With Thailand’s military government firmly in control after May’s bloodless coup, authorities are carrying out plans they say are aimed at restoring discipline, morality and patriotism to all Thais. The measures include a crackdown on illegal gambling, education reforms to promote students’ moral development, and a new 24-hour phone hotline for citizens to report misbehaving monks. Steve Sandford reports from Bangkok.
Video

Video Virtual Program Teaches Farming Skills

In a fast-changing world beset by unpredictable climate conditions, farmers cannot afford to ignore new technology. Researchers in Australia are developing an online virtual world program to share information about climate change and more sustainable farming techniques for sugar cane growers. As VOA's Zlatica Hoke reports, the idea is to create a wider support network for farmers.
Video

Video Airline Expert: Missile will Show Signature on Debris

The debris field from Malaysia Airlines Flight 17 is spread over a 21-kilometer radius in eastern Ukraine. It is expected to take investigators months to sort through the airplane pieces to learn about the missile that brought down the jetliner and who fired it. VOAs Carolyn Presutti explains how this work will be done.
Video

Video Treatment for Childhood Epilepsy Heats up Medical Marijuana Debate

In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Airbus Adds Metal 3D Printed Parts to New Jets

By the end of this year, European aircraft manufacturing consortium Airbus plans to deliver the first of its new, extra-wide-body passenger jets, the A350-XWB. Among other technological innovations, the new plane will also incorporate metal parts made in a 3-D printer. VOA's George Putic has more.
Video

Video AIDS Conference Welcomes Exciting Developments in HIV Treatment, Prevention

Significant strides have been made in recent years toward the treatment and prevention of HIV, the virus that causes AIDS. This year, at the International AIDS Conference, the AIDS community welcomed progress on a new pill that may prevent transmission of the deadly virus. VOA’s Anita Powell reports from Melbourne, Australia.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.