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In New York Thursday, the credit crisis moved back to centre stage as two big name financial forms defaulted on loan obligations and there was further grim data on the housing market.
The US dollar on Friday recovered losses against the euro before a key US employment report today.
The dollar was trading at $1.5385 against the euro at 8:55 a.m. in Dublin, after five days of falls from $1.5380 yesterday. It dipped earlier Friday from a new record of $1.5430.
The Dow Jones Industrial Average plunged by 214.60 points, or 1.8%, to close at 12040.39 on Thursday fuelled by falls in key financial components -. Bank of America slid 2.7%; Citigroup droppedl by 4.4%, and J.P. Morgan Chase declined 3.5%. The Dow has lost 9.2% in 2008.
The Standard & Poor's 500 fell 2.2%, or 29.36 points, to closes at 1304.34, the lowest since Sept. 22, 2006 and down 11% in 2008.
The Nasdaq Composite fell 2.3%, or 52.31 points, at 2220.50. It is has fallen 16% for the year.
SEE: US credit crisis worsens as two big financial firms default on loans; Americans' percentage of equity in their homes drops below 50% for the first time since 1945
Asia-Pacific stocks fell again Friday, ending a week of the biggest losses since August 2007.
The MSCI Asia Pacific Index, which tracks more than 1,050 regional companies fell 1.86% taking its loss in 2008 to 11% this year
The Nikkei 225 fell 3.3% and Australia's S&P/ASX 200 Index plunged 3.2%. India's BSE Sensex fell 4.18% and all other key national benchmarks fell.
Asia-Pacific Key Benchmarks
In Europe Friday, all 17 Western European markets that are open, are down.
In Dublin, the ISEQ Index is off 1.22%.
National benchmarks- Europe
Irish Share Prices
Euribor Rates
AIB Daily Report
Bank of Ireland Daily Report
Currencies
The euro is trading at $1.5385 and at £0.7644.
For live currency updates, check the right-hand column of the Finfacts home page.
Commodities
Crude oil for April delivery is trading on the New York Mercantile Exchange (Nymex) at $104.96 down 51 cents from Thursday. In London, Brent is trading on the International Commodities Exchange at $102.33 down 28 cents.
Prices for crude for future delivery went as high as $105.97 Thursday, before easing slightly.
Gold spot price
The spot price of gold is at $979.20 per ounce up $5.30 from Thursady's close in New York.
Mark O'Byrne, Director of Gold Assets UK and Ireland commented on Monday:
With oil having surged to new record highs (at $105.95 per barrel) and with the dollar falling to new record lows against the euro (1.5346) , gold looks set to topple the symbolic and psychologically important $1000 per ounce mark in the coming days as hedging inflation and risk aversion leads to safe haven buying.
Clear signs of increasing inflationary pressure were seen on both sides of the Atlantic.
Yesterday while the ISM services data was not as bad as expected the ADP employment report showed a fall of 23,000 jobs in February which bodes badly for the non-farm payrolls report on Friday. The Beige Book hinted at stagflation and Cleveland Fed's Pianalto said the U.S. economy was 'highly vulnerable' to the credit crunch.
The chief economist for the National Association of Home Builders said Tuesday that housing is in its "deepest, most rapid downswing since the Great Depression." David Seiders said that it is now affecting the entire U.S. economy where before it was regional and he said that “the downward momentum on housing prices appears to be accelerating.”
Stagflation looks increasingly likely and the macroeconomic barometer that is gold has sniffed this out. Indeed the only thing that seems likely to halt the likelihood of stagflation is a significant global deflationary contraction which would create demand destruction in the energy and food complex.
