US and European stocks closed at their lowest level of the year yesterday after Israel's killing of the spiritual leader of the militant group Hamas added to global security fears and caused a broad sell-off by investors.
In the US it was the third straight session of losses, sending major stock indexes down more than 1 per cent to their lowest levels since December. The Dow dropped more than 100 points for the second session in a row.
The Nasdaq Composite Index sank 30.56 points, or 1.57 per cent, to 1,909.91. The Dow Jones industrial average fell 21.85 points, or 1.20 per cent, to 10,064.75. The Standard & Poor's 500 Index lost 14.34 points, or 1.29 per cent, at 1,095.44.
The Nasdaq is down more than 11 per cent from its 2004 closing peak in late January. The Dow is off more than 6 per cent from its 2004 high in mid-February, hovering just above the psychological 10,000 milestone.
The S&P 500 is down more than 5 per cent since its 2004 high in February. In Dublin, shares dropped by close to 1.5 per cent, with the main banks among the worst victims. Dealers were downbeat, reporting difficulty in drumming up any buying activity.
"There's nothing to lift spirits," said one Dublin trader of the "sea of red" before him.
Selling was broad-based elsewhere across Europe, from the consumer cyclicals sector to travel to technology, media and telecoms.
Belgian telecoms operator Belgacom became the exception to the rule when it bucked the glum market to close 4.78 per cent higher in its first day of trade. Eircom was worse-off in Dublin, falling by close to 4 per cent to €1.47.
The FTSE Eurotop 300 index of pan-European blue chips finished 1.9 per cent lower at about 958.7 points - its lowest close since the end of 2003 - while the narrower DJ Euro Stoxx 50 index fell by 2.1 per cent to about 2,711.5.
"The Eurotop 300 is just below its 50-day moving average," said strategist Mr Bill McQuaker at Credit Suisse First Boston.
"We will never know whether these support lines would have held were it not for the terrorist attacks in Madrid but, in any case, it is hard for us to avoid the conclusion that markets are nearly perfectly balanced, poised to break decisively in one direction or the other."
In London, the FTSE 100 closed 1.9 per cent lower, with more than £20 billion sterling wiped off the value of Britain's biggest shares.
The German DAX shed 2.4 per cent, the CAC 40 was 2.1 per cent weaker in Paris and the Swiss blue chip index lost 2.7 per cent.
Many market observers downplayed the risk for a much sharper sell-off, saying that any positive news on the earnings or economic front would lure investors back to equities.
(Additional reporting: Reuters)
