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Global stocks in rout after AIG loss.
3 Mar 2009, 0038 hrs IST, REUTERS
NEW YORK: Global stocks fell sharply on Monday after a record $61.7 billion quarterly loss at AIG and an $18.3 billion capital request at HSBC slammed world markets, sending the dollar to 3-year highs and investors fleeing to the safety of government debt.
Insurer American International Group's quarterly loss, the largest in U.S. corporate history, renewed concerns about the health of the financial sector. The worldwide sell-off of risky assets came as oil prices dropped as much as 11 per cent.
"AIG again raised the specter of 'What's the bottom on the banking and finance sector?'" said Peter Jankovskis, director of research at OakBrook Investments LLC in Lisle, Illinois.
Warren Simpson, managing director at Stephens Capital Management in Little Rock, Arkansas said, "AIG is the stench that has just overtaken the market, no doubt about it."
European shares closed down 5 per cent after Asian stocks slid about 4 per cent. U.S. stocks fell more than 3 per cent as the Dow slid under the 7,000 mark for the the first time since October 1997 and the S&P 500 was poised to slide below 700.
Investors also were unnerved by HSBC, Europe's biggest bank, which launched a 12.5 billion pound rights issue to shore up its balance sheet, and comments by investor Warren Buffett, who said "the economy will be in shambles throughout 2009 ... and probably well beyond."
Shares of AIG, which lost $99.29 billion for all of 2008, fell 14 per cent to 48 cents a share as the company agreed to a new bailout. Shares of HSBC fell 18.8 per cent. FTSEurofirst 300 ended a whisker away from its lifetime low of 681.17 hit in March 2003.
Global stocks, as measured by MSCI's all-country world equity index, fell more than 4 per cent to almost a six-year low.
All 30 components of the Dow were in the red as more than one out of every six stocks on the New York Stock Exchange fell to new 52-week lows. Declining shares outnumbered advancing shares by more than 11 to 1.
Analysts said the news reaffirmed suspicion that more turmoil lies ahead, spurring investors to sell stocks for safer, dollar-denominated alternatives such as Treasuries.
3 Mar 2009, 0038 hrs IST, REUTERS
NEW YORK: Global stocks fell sharply on Monday after a record $61.7 billion quarterly loss at AIG and an $18.3 billion capital request at HSBC slammed world markets, sending the dollar to 3-year highs and investors fleeing to the safety of government debt.
Insurer American International Group's quarterly loss, the largest in U.S. corporate history, renewed concerns about the health of the financial sector. The worldwide sell-off of risky assets came as oil prices dropped as much as 11 per cent.
"AIG again raised the specter of 'What's the bottom on the banking and finance sector?'" said Peter Jankovskis, director of research at OakBrook Investments LLC in Lisle, Illinois.
Warren Simpson, managing director at Stephens Capital Management in Little Rock, Arkansas said, "AIG is the stench that has just overtaken the market, no doubt about it."
European shares closed down 5 per cent after Asian stocks slid about 4 per cent. U.S. stocks fell more than 3 per cent as the Dow slid under the 7,000 mark for the the first time since October 1997 and the S&P 500 was poised to slide below 700.
Investors also were unnerved by HSBC, Europe's biggest bank, which launched a 12.5 billion pound rights issue to shore up its balance sheet, and comments by investor Warren Buffett, who said "the economy will be in shambles throughout 2009 ... and probably well beyond."
Shares of AIG, which lost $99.29 billion for all of 2008, fell 14 per cent to 48 cents a share as the company agreed to a new bailout. Shares of HSBC fell 18.8 per cent. FTSEurofirst 300 ended a whisker away from its lifetime low of 681.17 hit in March 2003.
Global stocks, as measured by MSCI's all-country world equity index, fell more than 4 per cent to almost a six-year low.
All 30 components of the Dow were in the red as more than one out of every six stocks on the New York Stock Exchange fell to new 52-week lows. Declining shares outnumbered advancing shares by more than 11 to 1.
Analysts said the news reaffirmed suspicion that more turmoil lies ahead, spurring investors to sell stocks for safer, dollar-denominated alternatives such as Treasuries.
