Gold prices hit an all-time high as the European financial situation spurred the appetite for safer investments. The precious metal erased gains later but still ended the week about 2 percent higher.
Safe-haven buying also boosted prices of U.S. Treasury debt and the value of the U.S. dollar, which climbed to its highest level in a year against a basket of currencies. Stocks and oil prices plunged despite data showing U.S. retail sales and industrial production rose in April. The S&P 500 and the Nasdaq fell nearly 2 percent while U.S. crude oil prices slumped nearly 4 percent. European authorities announced a rescue plan of nearly $1 trillion for Greece and other indebted euro zone countries this week involving tough spending cuts, but investors were skeptical about weak public finances. "If you look long-term, everyone is worried about what these austerity measures will mean in terms of growth," said Kathy Lien, director of currency research at GFT in New York. The Dow Jones industrial average ended down 162.79 points, or 1.51 percent, at 10,620.16, while the Standard & Poor's 500 Index lost 21.76 points, or 1.88 percent, to 1,135.68. The Nasdaq Composite Index slumped 47.51 points, or 1.98 percent, to 2,346.85. Shares of credit card companies tumbled a day after the U.S. Senate voted to limit fees charged on credit and debit card transactions. Visa Inc lost 9.9 percent to $77.26 and MasterCard Inc shed 8.5 percent to $212.45. The MSCI world equity index plunged 2.4 percent, while the FTSEurofirst 300 index dropped 3.4 percent. Banks took a beating in Europe, with the STOXX Europe 600 banking index falling 5.2 percent. Spanish banks Santander and BBVA fell 9.0 percent and 7.6 percent, respectively. U.S. crude oil fell 3.75 percent to $71.61 a barrel, the lowest close since February 5. EURO BATTERED The EU's emergency assistance plan has done little to bolster confidence in the euro, a concern highlighted by U.S. While House Economic Adviser Paul Volcker. On Thursday Volcker said European debt troubles could undermine the single currency. The euro slid as low $1.2358 on electronic trading platform EBS, the lowest since October 2008. It last traded at $1.2370, 1.3 percent weaker. "The euro hasn't derived any benefits from any budget cuts from Spain and Portugal," said Chris Turner, head of FX strategy at ING, which forecasts the single European currency will be at $1.15 in six months. EUR/USD (CCY: EURUSD=X) Last Trade: *1.2361* Trade Time: May 14 Change: [image: Down]*0.0162* *(1.2936%)* Prev Close: 1.2523 Open: 1.2536 Day's Range: 1.2354 - 1.2576 52wk Range: 1.2354 - 1.5144 Bid: 1.2359 Ask: 1.2363 Quotes delayed, except where indicated otherwise. Currency in USD. [image: EUR/USD (EURUSD=X)]<http://finance.yahoo.com/echarts?s=EURUSD=X+Interactive#symbol=EURUSD=X;range=1d> http://economictimes.indiatimes.com/markets/forex/Euro-at-18-month-low-on-debt-woes/articleshow/5933369.cms -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
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