After 3 months of hope and enthusiasm, investors begin to show doubts about the prospects for global growth. On Monday, stocks and industrial commodities fell in both the U.S. and Europe. The Dow Jones Industrial Average fell 200.72 points, or 2.35%, to 8339.01. This brings us a total decline of 5% in the last six trading days. Monday’s performance represented the Dow’s sharpest percentage drop since April 20 and its lowest close in about a month. These last three months through June 12, the DJIA had soared 34%.

Investments whose ties to the global economy which made them the biggest recent gainers have now fallen. These investments include copper, oil, commodity-related companies, banking shares and some developing-country stock markets.

On top of the all the concerns regarding the global growth, investors also appear to be nervous about what Federal Reserve officials will say on Wednesday about whether or not they will continue to pump money into the economy. The fear is that it could still be several months before signs of real economic recovery start showing. Long-term investors continue to hold back, allowing stocks to fall.

The S&P 500 fell 3.06% to 893.04. The Nasdaq Composite Index fell 3.35% to 1766.19. Concerns continued when a World Bank report warned that the global economy could contract at a 2.9% rate this year, worse than the 1.7% contraction that was predicted earlier.

This entry was posted on Tuesday, June 23rd, 2009 at 10:28 am and is filed under News Analysis. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.