Stock market suffers worst drop of the year
The stock market suffered its worst drubbing of the year Tuesday, with the Dow industrials sinking more than 200 points as concerns about global growth reemerged on the heels of the market’s extended rally.
The Dow Jones industrial average saw its first triple-digit decline of the year after data showing that Europe’s economy contracted 0.3% in the fourth quarter ignited fear that troubles on the continent could spread throughout the global economy.
Investors also were unnerved by uncertainty over a proposed restructuring of Greek debt that is scheduled for this week. Private investors are deciding whether to take part in a voluntary debt exchange in which they would write off more than half the face value of their Greek fixed-income holdings.
If the debt swap fails, Greece may be forced to default on its obligations later this month. Investors are worried by predictions that a failed restructuring could cost the world economy about $1.3 trillion.
Many professional investors say the market is susceptible to at least a short-term downturn after a powerful rally over the last five months that had carried the Dow past 13,000. Despite generally upbeat U.S. economic news, concern has grown that stocks have gotten ahead of themselves.
The Dow fell 203.66 points, or 1.6%, to 12,759.15. The Standard & Poor’s 500 dropped 20.97 points, or 1.5%, to 1,343.36.
RELATED:
Lehman to distribute assets as it emerges from bankruptcy
Could the billionaires index somehow be a force for social good?
Failure to restructure Greek debt could cost economy $1.3 trillion
