Global growth worries hammer stocks a day after Fed holds rates; Bonds, gold rally
NEW YORK — Fears over slowing global growth hammered stocks in the U.S. and Europe on Friday and lifted prices of government bonds and other assets seen as safer bets.
The selling pushed down major stock indexes in Europe, before spreading to the U.S. The Standard and Poor's 500 index slumped to its biggest loss in more than two weeks as all 10 industry sectors of the broad market gauge fell. The drop was led by energy shares.
Stocks slumped a day after the Federal Reserve decided to hold interest rates near zero. That means borrowing costs will remain low for a while yet, a prospect that has in the past typically boosted stocks. But some investors, expecting the Fed would be confident enough to nudge rates up by at least a quarter of a point, interpreted the stand-pat stance as a sign that the global economy is dangerously weak.
"If growth in the strongest economy — the United States — isn't strong enough to raise rates even a quarter of point, what does that say about the prospects for global growth?" said Bill Strazzullo, chief strategist at market research firm Bell Curve Trading.
The Fed has kept its benchmark rate close to zero for almost seven years. In that time, U.S. stocks have tripled from their financial crisis low. The Fed meets again next month and in December.
The Dow Jones industrial average ended down 289.95 points, or 1.7 percent, to 16,384.79. The S&P 500 slumped 32.12 points, or 1.6 percent, to 1,958.08 and the Nasdaq composite shed 66.72 points, or 1.4 percent, to 4,827.23
more...
http://www.therepublic.com/view/story/33f1d4bbfea24dc280000fd06e5a7533/Financial-Markets