World News

World Stocks Plunge on Fears About Weakened Emerging Markets

World stock markets plunged Friday, as investors worried about a possible slowdown in emerging markets.

U.S. stock indexes dropped around 2 percent Friday, sinking for a second day. Markets in Paris and Frankfurt fell about 2.5 percent and Asian markets also mostly finished lower.

Analysts said investors were concerned about sharp drops in the value of currencies in several emerging economies, including Turkey, Russia, South Africa and Argentina, and a report Thursday that Chinese manufacturing is slowing.

In addition, some traders are worried about the withdrawal of global stimulus, especially in the United States, the world's largest economy. Policy makers at the country's central bank, the Federal Reserve, started to trim their direct support of the American economy this month and could reduce it further when they meet next week.

Some financial experts say the concern is that as the economic stimulus is cut in the most advanced economies, interest rates will rise in the U.S., Europe and Japan, and that investments there will then increase, to the detriment of emerging economies.

Featured Story

VIDEO: Top U.S. intelligence officials warn the Islamic State remains a “formidable and brutal threat” even as coalition airstrikes and fighting on the ground begin to erode its strength. But there are also indications that the constant bombardment is starting to take a more permanent toll. VOA National Security Reporter Jeff Seldin has more.

Video Degraded IS Still 'Formidable and Brutal'

US intelligence, military officials say Islamic State group losing ground in Iraq and perhaps elsewhere More