Stock markets unsettled over prospects of U.S. bailout plan
Stock markets remained unsettled Tuesday as the Bush administration pressured Congress to pass a $700-billion US bailout plan quickly in an effort to stabilize the financial system.
Toronto's TSX composite index closed down 105 points to 12,532. In New York, the Dow Jones lost 116 points, while the Nasdaq fell 25 points.
Investors in Europe and Asia were equally uncertain about prospects for the bailout and the U.S. economy, sending stock markets lower.
Britain's FTSE 100 index closed down 1.91 per cent, France's CAC 40 slid 1.98 per cent and Germany's Dax was off 0.64 per cent.
Hong Kong shares dropped after two days of gains. The benchmark Hang Seng index fell 3.87 per cent at the close of Tuesday's trading. Japan's markets were closed for a public holiday.
Recession fearsFrancis Lun, general manager of Fulbright Securities in Hong Kong, said investors are worried the U.S. economy will still tumble into a recession despite the bailout plan.
"So, the market's still very unsettled, and a lot of the short-term traders decided to take profit today," he said.
Oil prices were also unsettled, dipping Tuesday below $108 US a barrel in Asia after they surged on Monday.
Investors were initially relieved at the end of last week that U.S. federal authorities had drawn up a plan to rescue the country's banks from a mountain of bad mortgage debt.
But they are still digesting the details of the plan.
"Investors had a weekend to look at the news that was streaming out, and they are now finding fault in it," said Joseph Battipaglia, market strategist in the private client group at the investment firm Stifel Nicholaus in New York.
On Monday, stock markets in Canada and the United States stumbled badly in trading as investors sold off stocks.
With files from the Associated Press
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