U.S. Stocks Hit On Fear of Chinese Tightening
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U.S. stocks sold off broadly today on the heels of a sharp 5% drop in Chinese stocks on fears the central bank their will tighten more aggressively to deal with rising inflation. In addition, concerns of a Irish default and Euro debt contagion also contributed to the weakness.
The Dow lost 91 points to close at 11,193, the Nasdaq lost 37 and the S&P 500 lost 14.
On Thursday, consumer prices in China came in hot at 4.4% for October, raising fears that inflation could begin spinning out of control in the world's fastest growing economy.
The Shanghai Composite fell 5.2 percent. Other Asian markets were also under pressure, with the Hang Seng down 1.9%, the Nikkei 225 down 1.4%, and Straits Times is down 1.3%.
The weakness in China also hit commodities hard today, with Gold falling nearly $38, or 2.7 percent, to $1,365.50 an ounce, and Crude down $3, or 3.3 percent, to $84.88. Gold ETF SPDR Gold Shares (NYSE: GLD) fell 2.9 percent today, and oil ETF United States Oil (NYSE: USO) fell 3.6 percent.
Ironically, with China possibly tightening to slow down their overheating economy, the U.S. is embarking on a second round of quantitative easing, or Q2, to help stimulate growth here. The fed is currently in the process of purchasing $600 billion in treasury securities through the end of June 2011.
The Dow lost 91 points to close at 11,193, the Nasdaq lost 37 and the S&P 500 lost 14.
On Thursday, consumer prices in China came in hot at 4.4% for October, raising fears that inflation could begin spinning out of control in the world's fastest growing economy.
The Shanghai Composite fell 5.2 percent. Other Asian markets were also under pressure, with the Hang Seng down 1.9%, the Nikkei 225 down 1.4%, and Straits Times is down 1.3%.
The weakness in China also hit commodities hard today, with Gold falling nearly $38, or 2.7 percent, to $1,365.50 an ounce, and Crude down $3, or 3.3 percent, to $84.88. Gold ETF SPDR Gold Shares (NYSE: GLD) fell 2.9 percent today, and oil ETF United States Oil (NYSE: USO) fell 3.6 percent.
Ironically, with China possibly tightening to slow down their overheating economy, the U.S. is embarking on a second round of quantitative easing, or Q2, to help stimulate growth here. The fed is currently in the process of purchasing $600 billion in treasury securities through the end of June 2011.
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