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Last Updated: Friday, 19 October 2007, 22:35 GMT 23:35 UK
Dow Jones tumbles on credit fears
Traders on floor of New York Stock Exchange

The Dow Jones, the main US share index, saw shares plummet more than 360 points by the end of the week, amid concerns over the state of the US economy.

The benchmark index of blue-chip stocks shed 366.94 points or 2.64% at 13,522.02 by Friday's close of trade.

The slump followed a warning by equipment firm Caterpillar that the housing slowdown would harm the wider economy and cut its profit forecast.

Turmoil in world markets since the summer has raised fears of a recession.

'Poster child'

Caterpillar saw its shares down 5.3% to $73.57, and predicted weakness ahead after its earnings results, which missed forecasts.

"It's pretty ugly," said Bill Strazzullo, chief market strategist at Bell Curve Trading.

"A company like Caterpillar should be a poster child for global growth and benefits of the weak dollar," he said.

"It makes you question: Is global growth really that strong? Has the earnings kick from the weak dollar played itself out?"

The fall came on the twentieth anniversary of Black Monday - the day when stocks saw their biggest fall on the Dow Jones, losing some 23%.

Andy Brooks, head of trading at T Rowe Price, said: "Some of the earnings reports were a little disappointing but not that bad."

"I think we're responding emotionally to the 20th anniversary of the October 1987 stock market crash. I'd like to laugh except it hurts."

For stocks to fall by such proportions nowadays would mean a drop of around 3,000 points based on current market levels.

Global growth

The technology-laden Nasdaq fell 74.15 points or 2.65% to 2,725.16, while the broad-market Standard & Poor's 500 index declined 39.45 points 2.56% to 1,500.63.

Even though stocks have been volatile since the summer, with fears that the US housing slowdown would trigger broader problems, not long before indexes had been hitting record highs.

Finance leaders from G7 nations sought to mitigate the damage to the global economy in the wake of the credit crisis during meetings on Friday in Washington.

Ministers issued a statement pledging that they were "committed to doing our part in sustaining strong global growth," ahead of talks over the weekend involving the IMF and the World Bank.



MARKET DATA - 11:36 UK

FTSE 100
5429.64up
23.70 0.44%
Dax
5733.05up
19.54 0.34%
Cac 40
3784.02up
14.48 0.38%
Dow Jones
10403.79up
78.53 0.76%
Nasdaq
2273.57up
35.31 1.58%
S&P 500
1115.71up
11.22 1.02%
BBC Global 30
5707.15up
20.65 0.36%
Data delayed by at least 15 minutes


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