BBC News… Share prices slide as ‘perfect storm’ threatens markets

By on October 20th, 2014


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US shares ended largely flat on Thursday, after tracking losses on European and Asian stock markets.

Better-than-expected company earnings and a raft of positive economic data mitigated continuing concerns about global economic growth and the Ebola crisis.

Wall Street’s Dow JonesS&P 500 and Nasdaq indexes declined earlier.

The Dow Jones pared a 206 point decline to end down 24 points, or 0.15%.

The S&P 500 and the Nasdaq both ended slightly up for the day.

Markets welcomed economic data, as well as comments by a US Federal Reserve official, James Bullard, indicating that he believed the US central bank should re-evaluate its decision to end its extraordinary stimulus measures at the end of the month.

The Fed has been buying bonds in an effort to keep long-term interest rates low in a process known as quantitative easing, but that programme is set to end after Fed officials deemed the US economy was no longer in need of extraordinary support.

However, some analysts are hoping the Fed will re-think that decision when it meets later this month, from 28-29 October in Washington, DC.

Most observers, however, noted that Mr Bullard is not a member of the Fed’s rate-setting committee and that a move to continue stimulus measures seemed unlikely.

Increased costs

Meanwhile, the borrowing costs for Greece and Italy rose, and investors looking for a haven pushed gold higher.

In Europe, London’s FTSE 100 closed down 0.25% and the Cac 40 in Paris finished down 0.54%. Frankfurt’s Dax index bucked the trend to edge up 0.13%.

On Wednesday, the FTSE saw its heaviest one-day fall in 16 months. The S&P is down about 8% from a record closing high on 18 September.

Analysts said that a raft of disappointing economic and corporate news had panicked investors.

Recent poor data from China, Germany and the US have heightened worries that the global economic recovery could go into reverse.