The first trading day of the new week on Wall Street locked yesterday on light index drops inspired by the concerns over the expansion of the European debt crisis. By the end of the trading day, the Dow Jones Industrial Average dropped 0.4% to a level of 11,050 points, having dipped below the 11,000-point mark during the trading day. The NASDAQ index fell about 0.4%, reaching the 2,525-point level, whereas the S&P 500 index decreased 0.1% and reached the level of 1,188 points.
Most of Asia's stock markets have recorded sharp index declines this morning due to Wall Street descents recorded yesterday, as well as estimates that the Chinese government is planning to tighten its policies as part of its attempt to rein in inflation. As such, the Tokyo stock exchange dropped 1.7%, the Hong Kong exchange plunged about 1.1%, Singapore shed 0.5%, Shanghai declined by 3.0%, whereas the Seoul and Taiwan stock markets rose by 0.3%.
According to the predictions of European economists, the budget cuts that European government plan on implementing in order to put brakes on the debt crisis will hurt the European exports and demand sectors heavily. Europe's economy will continue slowing down next year, with the 16 Euro zone countries' GDP growing by 1.5% in 2011, this after having grown by 1.7% in 2010. The German economy, which provides the main positive point, is expected to grow by 3.7% in 2010 and continue leading the region's recovery, whereas the economies of Ireland, Greece, and Spain will continue shrinking due to the stern austerity programs introduced there. With the close of markets last night, the European stock markets locked on sharp index declines, with the FTSE index in London dropping by 1.75%, the CAC 40 index diving by about 2.5%, and the Frankfurt DAX index dropping by 2.2%.
Crude oil prices leaped up yesterday by more than 2%, locking over the level of 85 United States dollars for one barrel of oil due to the expectations for increased demand for heating oil due to colder than usual weather in Europe and the American North-East. January futures on crude oil have locked on 85.70 after a 2.4% ascent at the New York Commodities exchange. Gold futures for December have locked on a 0.3% ascent to a level of 1,366 United States dollars for one ounce of gold at the New York commodities exchange.
