Friday, October 10, 2008
Oct. 10 (Bloomberg) — Stocks tumbled around the world, driving the Standard & Poor’s 500 Index to its worst week on record, and commodities slumped amid growing concern international attempts to prop up financial markets will fail to avert a recession.
The S&P 500 fell 7 percent to the lowest level since the start of the Iraq War in 2003 while stocks in Europe and Japan staged the steepest weekly tumble in at least 21 years. Drops in Brazil and India pushed the MSCI emerging markets index to its worst week ever. Oil fell as much as 9.2 percent to $78.61, copper was poised for its largest weekly decrease in two decades.
“We have reached the panic stage,” said Espen Furnes, an Oslo-based fund manager at Storebrand Asset Management, which has the equivalent of $48 billion. “Fundamentals don’t count anymore.”
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The MSCI World index of 23 developed countries dropped for a seventh day as investors lost faith in government bank rescue plans, coordinated interest rate cuts and assurances from world leaders that the crisis will ease.
While stocks briefly pared declines early in the day, comments from President George W. Bush and Italian Prime Minister Silvio Berlusconi did nothing to restore confidence and equities resumed their plunge. Bush said the U.S. is using a “wide range of tools” to stabilize markets and sough to reassure Americans that the $700 billion rescue plan passed by Congress last week will work.
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The S&P 500 declined 64.45 points to 845.47 as of 2:02 p.m. in New York, bringing its weekly drop to 23 percent. The MSCI World Index lost 7.8 percent to extend this week’s slide to 22 percent, the most since records began in 1970. Europe’s Dow Jones Stoxx 600 Index slumped 7.5 percent. Japan’s Nikkei 225 Stock Average slumped 11 percent, the second-biggest drop on record. The MSCI Asia Pacific sank 6.9 percent.