MARKETS SLUMP ON WORRIES; ANALYSTS FEARING INFLUENCE OF BRAZIL.Byline: Patricia Lamiell Associated Press Associated Press: see news agency. Associated Press (AP) Cooperative news agency, the oldest and largest in the U.S. and long the largest in the world. Stocks were pummeled for the second day in a row Thursday, as continued economic turmoil in Brazil raised new fears among investors that profits of U.S. companies operating in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. could suffer. The Dow Jones industrial average Dow Jones Industrial Average The best known U.S. index of stocks. A price-weighted average of 30 actively traded blue-chip stocks, primarily industrials including stocks that trade on the New York Stock Exchange. fell 228.63 to 9,120.93. The Dow deepened Wednesday's 125-point loss and put it 60 points below where it began the year. The Standard & Poor's 500 fell 22.21 to 1,212.19, and the technology-heavy Nasdaq composite index Nasdaq Composite Index An index that indicates price movements of securities in the over-the-counter market. It includes all domestic common stocks in the Nasdaq System (approximately 5,000 stocks) and is weighted according to the market value of each listed fell 39.99 to 2,276.82. The decline started in the morning and accelerated later on, after a second key banking official in Brazil resigned, sending Brazil's main stock index sharply lower for the second day in a row. Trading on the Sao Paulo stock exchange Sao Paulo Stock Exchange See: Bolsa de Valores de Sao Paulo , Latin America's largest, was halted for 30 minutes after a 10 percent plunge, following a 5 percent drop Wednesday. The leading stock index in Brazil ended Thursday off 9.97 percent. Brazil started a worldwide market decline on Wednesday after its central bank chief resigned and his successor devalued de·val·ue also de·val·u·ate v. de·val·ued also de·valu·at·ed, de·val·u·ing also de·val·u·at·ing, de·val·ues also de·val·u·ates v.tr. 1. To lessen or cancel the value of. the Brazilian currency by about 8 percent. On Thursday the Central Bank's director of the banking industry resigned. Stock investors are not so much concerned with Brazil, which by itself takes up only 2 percent of U.S. exports. But Brazil is the biggest and most important economy in Latin America, which accounts for 20 percent of U.S. exports. The real fear is that its problems will spread throughout Latin America and specifically to Mexico, a major trading partner with the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Mexico's main stock index, however, ended higher on the day. There were also concerns about how Brazil would affect the dollar. The dollar actually was stable against the Brazilian currency - the real - Thursday and firmer against European currencies and the Japanese yen. But, if an economic downturn in Latin America spreads to the United States and causes the dollar to fall, that could cause a rout on Wall Street that could make last summer's dizzying drop tied to problems in Asia and Russia look like a cakewalk, said Peter Canelo, U.S. investment strategist at Morgan Stanley Dean Witter. ``The U.S. dollar can be threatened, and if the U.S. dollar goes down, people can pull their money out of U.S. stocks and bonds,'' Canelo said. |
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