Asian stocks mirror Wall Street plunge
Asian and Pacific stocks tumbled sharply on Thursday after Wall Street finished at its lowest point since Spring 2003, according to CNN.
Tokyo`s Nikkei index shed 6.9 percent. The market slumped as Japan`s Finance Ministry announced a 63.9 billion yen ($663 million) trade deficit in October -- the first for the month in 28 years -- after a slowing global economy cut into the nation`s exports.
Seoul`s KOSPI index dropped 6.7 percent on the day, while Australia`s All Ordinaries index closed 4.3 percent lower and Hong Kong`s Hang Seng index fell 5.5 percent in early afternoon trading.
U.S. stocks nosedived Wednesday amid ongoing investor worries about the economy and the future of the auto industry, with the Dow Jones industrial average closing below 8,000 for the first time since March 2003.
The Dow shed 427 points to close down about 5.1 percent. All 30 Dow components ended lower.
The Standard & Poor`s 500 index slid 6 percent to its lowest level since March 2003. And the Nasdaq composite lost 6.5 percent to settle at its lowest point since April 2003.
Stocks languished for most of the day, with the selloff accelerating near the close of trade. Wednesday`s dramatic retreat erased gains made in the previous session.
"The market is fearful of the fallout from the credit crisis and the global economic slowdown," said Todd Salamone, market strategist at Schaeffer`s Investment Research.
Investors are grappling with a possible bankruptcy in the automotive industry, something analysts say could have dire implications for the broader economy, as a second day of congressional hearings ended without resolution.
"The crisis of confidence is back on the front page," said Todd Morgan, senior managing director of Bel Air Investment Advisors, a Los Angeles-based firm with nearly $6 billion in assets under management. "You need some positive catalyst, something, to change the attitude of investors [and] the auto debate is hurting confidence."
Meanwhile, weak readings on the nation`s housing market and a sharp decline in consumer prices reflected the challenges facing the economy and drove down shares of financial services firms.
Also on Wednesday, the Federal Reserve released minutes from its most recent meeting that showed the central bank has significantly lowered its outlook for economic activity this year and next. It also signaled that more interest rate cuts may be needed to prevent further damage to the battered economy.
Economic data cast a pall over the market, highlighting anemic consumer spending trends and ongoing weakness in the housing market.
Separately, the Commerce Department reported record declines in both housing starts and building permits, darkening the outlook for new home construction.
U.S. light crude oil for December delivery fell 77 cents to settle at a 21-month low of $53.26 a barrel on the New York Mercantile Exchange. It was the lowest closing price since January 22, 2007 when oil settled at $51.13 a barrel.