➢➢➢ Wall Street slides amid fears over impact of Japan quake

Discussion in 'The Water Cooler' started by cybercore, Mar 14, 2011.

  1. cybercore

    cybercore New Member

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    NEW YORK — Wall Street followed Japanese stocks lower Monday, as investors worried about the impact of Friday’s devastating earthquake and tsunami that laid waste to cities along Japan’s northeast coast, killing thousands and causing tens of billions of dollars in damage.

    The Dow Jones industrial average was lately down over 120 points. Shares in Europe mostly fell, led lower by shares of insurance and luxury shares on worries over the sectors’ exposure to Japan.

    Earlier Monday, the Tokyo stock market plunged, closing down 6.18 percent on its first day of business after the earthquake and tsunami. Shares in other Asian markets were mixed.

    Oil prices dropped below $99 a barrel as the disaster threatened to send Japan, the world's third-largest economy, into a recession that could crimp demand for crude. In currencies, the dollar was down against the yen and the euro.

    The Bank of Japan sought to alleviate the economic blow to the nation by boosting its asset-purchase program and injecting 15 trillion yen ($183.8 billion) into money markets to provide liquidity. By flooding the banking system with cash, the central bank hopes banks will continue lending money and meet the likely surge in demand for post-earthquake funds.

    Investment bank Credit Suisse put economic losses from the quake at no less than $171 billion, although Finance Minister Yoshihiko Noda said it was too early to put together a firm figure to compile a supplementary budget.

    Japanese ports handling as much as 7 percent of the country's industrial output sustained major damage, disrupting global supply chains and causing billions of dollars in losses, industry officials said.

    Concern over the impact of the earthquake and tsunami on the Japanese economy was compounded by fears about the long-term impact on power supplies after the quake damaged nuclear generators in northern Japan.

    About a fifth of the country's nuclear power generation capacity has been shut down by the disaster. Thermal plants also shut down, forcing the world's third-biggest economy to instigate rolling blackouts to conserve energy.
    Story: Japan quake set to damage already struggling economy

    On Wall Street, companies affected the most were those with exposure to Japan and the nuclear industry. General Electric, which has combined nuclear ventures with Hitachi, fell 2 percent to $19.93. Insurance companies — many of which will likely face heavy claims for lost property and infrastructure — also suffered sharp drops.

    Quotes delayed 15+ min.

    Auto and electronics makers were also among the worst hit. Toyota, which said it would suspend production at all its car plants until at least March 16, reducing output by at least 40,000 vehicles, saw its shares fall.

    In Japan, shares of industrial and materials companies rose on expectations that they will benefit from Japan's eventual rebuilding efforts. Japanese construction company Kajima Corp. soared 22.2 percent and Nishimatsu Construction Co. Ltd. jumped 19.3 percent.

    U.S. stocks closed the week on a high note on Friday, on relief that unrest did not engulf top oil producer Saudi Arabia, calming some investors who worried the market was entering a near-term slide.

    Stocks snapped back from early-week losses even as other markets were hit hard by the devastating quake in Japan. Oil refiners and industrial-related shares led Wall Street higher.



    More Wall Street slides amid fears over impact of Japan quake
     

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