Stocks sink on fears of Asia slowdown, Irish debt
Tuesday, November 16, 2021 4:23 PM

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(Source: Associated Press/AP Online)By DAVID K. RANDALL

NEW YORK - Stocks are falling to their lowest level in a month as worries mount over a slowdown in China and a debt crisis in Ireland.

Asian markets led a global sell-off Tuesday after South Korea raised interest rates and investors worried that China would follow suit.

European officials scrambled to stop Ireland's debt troubles from turning into another meltdown, six months after a bailout of Greece.

According to preliminary calculations, the Dow Jones industrial average is down 178, or 1.6 percent, at 11,024.

The S&P 500 is down 19, or 1.6 percent, to 1,178, while the Nasdaq is down 44, or 1.8 percent, at 2,470.

Eight shares fell for every one that rose on the New York Stock Exchange, where volume came to 1.3 billion shares.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

NEW YORK (AP) - The Dow Jones industrial average traded below 11,000 for the first time in nearly a month Tuesday as worries mounted about inflation in Asia and as European leaders met to discuss a bailout of Ireland.

The Dow dropped nearly 200 points in afternoon trading, with the Travelers Companies Inc. leading the way. Only two of the 30 stocks that make up the Dow rose. Home Depot Inc. and Wal-Mart Stores Inc. both posted gains after reporting better results.

Asian markets started a global sell-off in stocks after South Korea's central bank raised interest rates to curb inflation. Shares also fell in Shanghai and Hong Kong as speculation spread that China will take more steps to rein in its red-hot economy, which would dampen global demand for industrial goods.

Basic materials companies, which have benefited from the booming demand from China, were among the biggest losers in U.S. trading. Freeport-McMoRan Copper & Gold Inc. fell 4.7 percent, Alcoa was off 3.4 percent, and Monsanto Co. was off 2.5 percent.

The Dow fell 198.56, or 1.8 percent, to 11,003.41, having dipped below 11,000 earlier in the day for the first time since Oct. 20.

The Standard & Poor's 500 index fell 22.51, or 1.9 percent, to 1,175.24, while the Nasdaq composite index fell 46.06, or 1.8 percent, to 2,467.76.

While Asian countries are dealing with excessive economic growth and inflation, European finance ministers were trying to figure out if Ireland would be the latest European country to need a bailout.

Similar problems in Greece earlier this year hurt stocks worldwide as its government had to get bailed out by fellow European nations and the International Monetary Fund. Greece fell into a fiscal crisis following runaway spending and a lack of trust from investors following revelations that Greece published faulty budget figures. Ireland, meanwhile, is staggering under the costs of nationalizing three banks after that country's real estate boom imploded.

"It's been simmering for a while," Scott Brown, chief economist at Raymond James & Associates, said of the European debt problems. "Now it's coming to a complete boil."

Brown said Ireland is more troublesome for Europe than Greece because more of Ireland's debt is held by major banks, especially in England. A default by Ireland could be another blow to banks that have only recently recovered from the global credit crisis. Shares of British banks HSBC and Barclays PLC both fell more than 3 percent.

There are also fears that if Ireland needs a bailout it will spook investors who hold debt from other European countries.

Ireland is a "precursor to Spain," said Quincy Krosby, a market strategist at Prudential Financial. "It's a precursor to Portugal" as well.

The dollar surged against the euro, approaching its highest level against the shared European currency since late September. The dollar also jumped 0.8 percent against an index that measures it against a group of six other currencies.

Treasury prices rose for the first time in three days, sending yields lower as investors sought out relatively safe assets. The yield on the 10-year note edged down to 2.86 percent from 2.95 percent.

Shares fell overseas as well. The Stoxx 50 index, which tracks blue chip companies in Europe, fell 2.5 percent, while Japan's Nikkei fell 0.3 percent. China's Shanghai composite index fell 4 percent.

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