FINANCIAL TIMES: US equity markets were lower on Monday, adding to pressure on European indices as fears about a potential recession in the world’s biggest economy intensified.
The dollar fell to fresh lows against the euro after Warren Buffett, the billionaire investor, warned that the US economy was in a recession and data showed manufacturing activity contracted last month.
The chief investment officer of Berkshire Hathaway and one of the most influential investors in the US also said he was withdrawing his offer to guarantee $800bn of municipal bonds backed by MBIA, Ambac Financial and FGIC.
The Institute for Supply Management February manufacturing report fell to 48.3 from 50.7 in January, although the fall was slightly better than a consensus forecast of 48. A reading of 50 marks the inflection point between growth and contraction.
“The ISM data was not nearly as soft as the Chicago and Philly Fed indices suggested, and is certainly better than the market’s worst fears,” Alan Ruskin of RBS Global Banking & Markets, said.
The benchmark S&P 500 index fell 0.4 per cent to 1,325.99, off earlier lows, while the Dow Jones industrial average slipped 0.5 per cent to 12,210.10. The Nasdaq composite shed 0.7 per cent to 1,732.84.
“It seems that equities are finally becoming aware that all other asset classes are in risk aversion mode,” analysts at BNP Paribas said.
“They are also recognizing that the prospects for profit growth in the near term could be constrained, given the procession of economic data highlighting the fragile state of the US economy.” Dollar declines spark equity sell-off >>> By Chris Bryant and Stacy-Marie Ishmael in New York, Michael Hunter in London, and Lindsay Whipp in Tokyo | March 3 2008
BBC:
Stock Markets Fall on US Worries
TIMES ONLINE:
Warren Buffett Declares America in Recession By Dearbail Jordan and Agencies
NZZ Online:
Aktienmärkte auf Talfahrt: US-Börsen im Minus – Banken unter Druck
Mark Alexander (Paperback)
Mark Alexander (Hardback)
