News / Economy

US Stocks Dive; US, European Economies Shake Investors

Specialist Gregg Maloney works at his post on the floor of the New York Stock Exchange Thursday, Aug. 18, 2011
Specialist Gregg Maloney works at his post on the floor of the New York Stock Exchange Thursday, Aug. 18, 2011
Bernard Shusman

Major stock indexes in the United States dropped sharply on Thursday.  

For many analysts, there are two main reasons for the market drop. One is the U.S. economy; the other is the European debt crisis.   

Jon Henes, a managing partner and financial expert at the New York-based law firm, Kirkland and Ellis, said a meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel this past week to address Europe's financial troubles was underwhelming.  

"We need to find a way to stabilize and capitalize the European banks before there is a monetary crisis. And then, on top of it, we’re looking at the U.S. and you’ve got inflation going up," said Henes. "You’ve got the housing market continuing to be in a depression and all the news coming out about housing is bad. You have the Philly [Philadelphia branch of the] Fed [Federal Reserve, or U.S. central bank,] report that came out today that was very weak. And as a result, you have people focused on what bad news there is in the economic world."

Henes said that because of the bad news, U.S. financial markets reacted negatively, causing what he called a crisis in confidence.

"What we’re seeing is Americans just not having confidence that our political leadership is going to get things done appropriately [not only] in the U.S., but also in Europe," said Henes.

Meanwhile, gold - traditionally considered a haven for investors - rose in price to more than $1,800 an ounce.  

Peter Cardillo, chief market analyst with Rockwell Global Capital, said soaring gold prices are due to several factors.

"One, continued central bank buying and, second, a total distrust in paper currencies. And so, obviously, investors are flocking to gold. And we will probably continue to see gold going higher."

Cardillo says gold might soon hit $2,000 an ounce. Cardillo also said he sees a slight recovery in the U.S. economy by year’s end.

Related video by Carolyn Weaver:

You May Like

China Investigates Former Powerful Security Chief

Former security chief and member of Politburo Standing Committee, Zhou Yongkang, under investigation for suspected 'serious disciplinary violation' More

India, US Look to Reset Ties During Kerry Visit

This week's talks will be first high level interaction between two countries since Prime Minister Narendra Modi took charge More

Video Young African Leadership Program Renamed to Honor Mandela

YALI program, launched by President Obama in 2010, aims to build skills in business, entrepreneurship, public management and civic leadership 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.
Vietnamese Staging Chinese Product Boycott After Oil Rig Spati
X
Reasey Poch
July 28, 2014 7:18 PM
China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video Vietnamese Staging Chinese Product Boycott After Oil Rig Spat

China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video ESA Spacecraft to Land on a Comet

After a long flight through deep space, a European Space Agency probe is finally approaching its target -- a comet millions of kilometers away from earth. Scientists say the mission may lead to some startling discoveries about the origins of the water on earth. VOA’s George Putic has more.
Video

Video Young Africans Arrive in US for Leadership Program

President Barack Obama's Young African Leadership Initiative has brought hundreds of young Africans to the United States for a six-week program aimed at building their knowledge and skills in fields such as public administration and business. Out of the 50,000 young Africans who applied for the program, just one percent was accepted. VOA's Laurel Bowman caught up with some of those who made the cut and has this report.
Video

Video In Honduras, Amnesty Rumors Fuel US Migration Surges

False rumors in Central America are fueling the current surge of undocumented young people being apprehended at the U.S. border. The inaccurate claims suggest the U.S. will give amnesty to young migrants from the region. As VOA's Brian Padden reports from Honduras, these rumors trace back to President Obama's 2012 executive order to halt deportations for some young undocumented immigrants already living in the United States.
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.

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.