US stocks dive on eurozone turmoil

A man walks in front of the New York Stock Exchange in New York City, where stocks plunged on Friday. Photo / AFP
A man walks in front of the New York Stock Exchange in New York City, where stocks plunged on Friday. Photo / AFP

US stocks have plunged, with the Dow Jones Industrial Average sliding more than 300 points, as global stock markets were stung by increased anxiety in the eurozone over Greece's bailout.

The Dow fell 303.68 points (2.69 per cent) to close at 10,992.13. The broader S&P 500 fell 31.67 points (2.67 per cent) to 1154.23, while the tech-heavy Nasdaq Composite shed 61.15 points (2.42 per cent) to 2467.99.

Early losses on Wall Street accelerated after the unexpected news that the European Central Bank's chief economist, Juergen Stark, was resigning "for personal reasons".

Hours after his resignation was announced, Stark called for drastic reforms to the eurozone, as ECB watchers suggested that the bank was deeply split over its handling of Europe's sovereign debt crisis.

Stark, a German, had been a sharp critic of the ECB's controversial program of buying government bonds of deeply indebted eurozone countries like Greece, Ireland, Portugal, Spain and Italy.

"The markets are falling sharply because there is a lot of fear that there might be a European sovereign debt situation, and in particular in Greece," said Peter Cardillo, chief market economist of Rockwell Global Capital.

Shell-shocked investors scurried for the safety of US Treasuries, sending the yield on the 10-year note to its lowest level in history.

The 10-year yield dropped as low as 1.896 per cent, falling below 1.9 per cent for the first time, before bouncing back to stand at 1.915 per cent. Bond prices and yields move in opposite directions.

Financial stocks were down sharply, although US banks fared better than some of their counterparts in Europe. Citigroup sank 4.4 per cent and JPMorgan Chase dropped 4.3 per cent.

- AFP

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