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Japanese crisis drives down global stock prices

March 15, 2011 |  7:56 am

Mounting fears about the earthquake-induced crisis in Japan pushed down stock prices around the world.

The Dow Jones industrial average was down 200.79 points, or 1.7%, to 11,792.52 points at midday Tuesday. This represents the sharpest drop since a massive earthquake hit Japan last week.

"The sanguine initial reaction of global financial markets to the earthquake that struck Japan last Friday has been short-lived," John Higgins, an economist with Capital Economics, wrote to clients on Tuesday.

In Japan, the Nikkei stock index fell 10.5% Tuesday, making for its sharpest two-day drop since 1987.

Leading indexes were down 4.7% in Germany and 3.5% in France.

Investors reacted to the broadening nuclear power crisis that has followed the quake off the Japanese coast. Authorities struggled on Tuesday to contain new radiation leaks at a nuclear reactor 150 miles north of Tokyo.

Shares in insurance companies that may be forced to cover Japanese losses were particularly hard hit on Tuesday.

In the United States, the Dow has fallen three of the last four days, driven both by the earthquake damage in Japan and the continuing unrest in the Middle East, where Saudi Arabian military forces have entered Bahrain.

The Standard & Poor's 500 index was down 20.75 points, or 1.6%, to 1275.68 on Tuesday.

-- Nathaniel Popper in New York