Gold keeps hitting record highs as fearful investors turn to the metal as a safe haven.
Major European markets closed lower on Friday, ending another turbulent week. Continued fears about a slowdown in the global economy and high levels of debt in the eurozone had driven indexes lower for much of the day, the BBC reported. At one point, European markets were sharply lower, with falls of more than 3 percent for some leading indexes. By the close, London’s FTSE 100 was down 1 percent, Paris’s Cac was down 1.9 percent and Frankfurt’s Dax was down 2.2 percent. The losses leave the 100 index down 13 percent on the month, with the French and German markets worse hit, losing 18.3 percent and 24 percent respectively. Also, US stocks closed down again last friday. Now the giant US investment bank, Morgan Stanley is warning that, on both sides of the Atlantic, economies are “dangerously close to recession”. In New York, falls extended in late trade to take the Dow Jones to a close of 1.57 percent.
Investors are worried global growth is slowing, and that major economies may be heading back into recession. A former governor of the US Federal Reserve, Laurence Meyer, said he thought the US would manage to avoid a downturn: “I think the most likely development is that we get some rebound – modest, disappointing – rebound in the second half. The Standard & Poor’s 500-stock index dropped 17.12 points, or 1.5 percent, to 1123.53, led lower by technology and financial stocks. All 10 of the S&P 500’s sectors closed in negative territory. The index has tumbled 16 percent over its four-week losing skid. The Nasdaq Composite slid 38.59 points, or 1.62 percent, to 2341.84, a fresh 2011 closing low. The technology-heavy index is down 18 percent over the past four weeks. For the year, it’s off 12 percent. In corporate news, blue-chip component Bank of America fell four cents, or 0.6 percent, to 6.97. The company is cutting 3,500 jobs in the current quarter and is working on a broader restructuring that could eliminate thousands of additional positions, according to wsj.com.
In Asia, South Korea’s Kospi dropped 6.2 percent, while Japan’s Nikkei 225 fell 2.4 percent and Australia’s benchmark S&P/ASX 200 index ended down 3.5 percent. Many analysts are questioning if a bear market – one in which the long-term trend is negative – has now developed and is here to stay.
As fears mount that global markets are no longer safe, investors are turning to gold as an investment, which has resulted in its price reaching a new high. As of Friday morning, the price of gold had jumped to as high as $1,881 per ounce, which marks a 7 percent increase this week alone, gobankingrates.com informs. Oil settles modestly lower, loses 3.7 percent in week
U.S. 10-year bond slumps below 2 pc
The yield on the 10-year notes hit a record low of 1.97 % in morning trading, following the announcement that the Philadelphia Fed Index, an important regional indicator of U.S. manufacturing activity, had taken a shocking downturn to its lowest level since the March, 2009, depths of the recession, according to theglobeandmail.com. The benchmark bond ended the day at 2.06% , just above its record-low close of 2.05 % in December, 2008. The dollar also fell against the major currencies Friday, pushing it toward a weekly decline, while the greenback hit a new low against the Japanese yen.