Wall Street hammered by flu fears
Wall Street followed global markets lower yesterday as fears about the spread of a deadly swine flu strain prompted traders to turn cautious.
The Dow Jones Industrial Average dropped 77.18 points (0.96 percent) to 7,999.11 and the Nasdaq composite shed 18.18 points (1.07 percent) to 1,676.11 in the first trades.
The broad-market Standard & Poor's 500 index declined 8.78 points (1.01 percent) to 857.45.
In the absence of economic news markets focused on the swine flu that has killed over 100 people in Mexico and appeared to be spreading across continents.
"The world won't come to a standstill, but already the market is digesting swine flu stories with a forlorn perspective that a global pandemic is inevitable," said Patrick O'Hare at Briefing.com.
"The attendant consequences for economic growth of a global pandemic wouldn't be good at all, of course, but the fear is way more pressing than the reality at this time. Nonetheless, it is certainly serving as an effective profit-taking catalyst."
Global stocks were dragged down by a tumbling travel sector. Strong gains for the heavyweight pharmaceutical sector failed to prevent leading indices across Europe and Asia sliding into the red, as the value of airlines' stocks plunged on worries that governments could impose travel restrictions.
"Swine flu is ripping through the markets creating uncertainty in its wake," said Manoj Ladwa, senior trader at financial spread-betting firm ETX Capital in London.
"US markets are sure to be heavily affected by this crisis when they open later today."
Overall, London's FTSE 100 index was down 0.71 percent, pulling back from losses of more than one percent following the open. Frankfurt shed 1.26 percent, Paris lost 1.28 percent and Madrid dived 2.54 percent in early afternoon deals.
The Spanish government said a man who recently returned from Mexico has contracted swine flu, the first recorded case of the virus in Europe.
"News over the weekend of a deadly flu outbreak is rocking financial markets," said CMC Markets dealer Matt Buckland.
"It's also worth bearing in mind that after last week's gains many would have been looking to start locking in profits but clearly this (flu) news has the potential to become a rather serious development."
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