Do not believe the government, they lie all the time....
Global shares have fallen sharply after figures showing a drop in US consumer spending dampened the enthusiasm that followed Thursday's US GDP figures. US consumer spending dropped by 0.5% in September after a 1.4% rise in August - the first fall in five months. The figures wiped out gains made on Thursday sparked by data showing the US economy was growing again. Leading US shares lost 2.5%, while French and German shares suffered even greater losses, slumping about 3%. France's Cac 40 index fell 106 points, or 2.9%, to 3,608, while Germany's Dax index shed 172 points, or 3.1%, to 5,415. The UK's FTSE also suffered, falling 93 points, or 1.8%, to 5,045, while the US Dow Jones index lost 250 points, or 2.5%, to 9,713. "Traders may be booking some profits as they look for the next catalyst to emerge to signal that the recent surge in the equity markets was warranted by underlying fundamental economic data," said broker Charles Schwab. The price of oil also fell sharply, with US light crude dropping $2.87 to $77 a barrel. London Brent lost $2.79 to $75.25 barrel. Support measures The fall in consumer spending in the US coincided with the withdrawal at the end of August of the government's car scrappage scheme. The weak spending figures fuelled fears that the strong growth in the US economy between July and September was partly due to such government support measures and that, without them, the recovery might not be as strong as had been hoped. The government has also introduced an $8,000 (£4,864) tax credit for first-time buyers that is due to expire on 30 November. Figures released earlier in the week showed that the annual rate of new home sales fell in September, the first fall since March. Some analysts attributed this fall to the proximity of the 30 November deadline. Home buyers may be wary of buying this close to the deadline in case they do not finalise the purchase in time to qualify for the credit, they said. US shares rallied on Thursday on figures that showed the US economy expanding by an annual rate of 3.5% during the third quarter, more than analysts had expected. --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "World-thread" 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/world-thread?hl=en -~----------~----~----~----~------~----~------~--~---
