Stocks fall in eurozone as U.S. jobs report adds to investor worries
On Monday, Asia's stock market took a tumble, and markets in the European Union followed suit with falls of their own.
The reason for the beating taken by the foreign markets centered largely on fears that the U.S. is sliding back into a recession after a Friday report that the nation added no new jobs in August and kept its unemployment steady 9.1%. Another factor is worry over the ongoing European debt crisis, according to a report from the Associated Press.
Reactionary market declines could be seen across Europe on Labor Day as the U.S. stock market was closed. Germany's DAX index fell 5.28%, France's CAC 40 fell 4.73%, the FTSE 100 in London fell 3.58%, and the Euro Stoxx 50 fell 5.11%.
Retail sales across the 17-nation eurozone saw a surprise increase in July, but a report on the E.U.'s services sector released Monday revealed a slowdown across Europe for the fifth consecutive month, the AP said.
"The purchasing managers' index for the eurozone showed the services sector was still growing -- unlike the manufacturing sector -- but only barely," the AP said. "That will add pressure on the European Central Bank to keep interest rates on hold when it meets this week."
The souring economic situations in Asia, Europe and the U.S. are leaving investors with "so much uncertainty, so much fear, that investors don't know what to do," David Kotok, chairman and chief investment officer at Cumberland Advisors, told the AP. "I don't remember the last time stocks were so cheap and nobody wanted them."
More evidence of investor worries were evident as well.
"The difference in interest rates between the Greek and benchmark German 10-year bonds, known as the spread, spiraled to new records on Monday, topping 17.3 percentage points," the AP said. "Yields on the Greek bonds were above 18%."
President Obama is set to give a major speech Thursday night in which he is expected to lay out proposals seeking to spark job creation. Obama previewed his speech in Detroit on Monday, saying the Republican Party will be publicly held accountable if its members don't support his job-creation plans.
From Monday's slumps in Asia and Europe, it's clear that investors on those continents will be watching to see whether Obama and U.S. lawmakers can turn the tide and stave off another recession.
-- Nathan Olivarez-Giles
Photo: Traders in Frankfurt, Germany. Credit: Michael Probst / Associated Press