Fed Chairman's Comments on the U.S. Economy Chill Markets Across Europe and Latin America
Federal Reserve Chairman Alan Greenspan dealt a punch to stock markets across Europe and Latin America when he took aim at the booming U.S. economy and called its performance "unsustainable."</br></br>Mr. Greenspan's comments, which raised fears of higher U.S. interest rates and a correction in U.S. stocks, came towards the end of the trading day in Europe, where it erased earlier gains. London closed down 0.8%, Paris fell 1.3%, while Germany tumbled 1% in electronic trading.</br></br>Latin American markets followed Wall Street's direction, with Mexico shedding 1.1%, Argentina 1.4% and Brazil 0.4% But Asian markets, which closed before Mr. Greenspan's congressional testimony, ended mixed, with Tokyo adding 0.6%, helped by a $4 billion initial offering by railway stock J.R. Tokai. World-wide, stocks fell in dollar terms. The Dow Jones World Stock Index fell 0.47, or 0.27%, to 175.99.</br></br>In LONDON, the market initially rallied on the back of Wall Street's rise on Tuesday. But Mr. Greenspan's remarks sent the London market into reverse and the FTSE 100 index, which had been up 40 points, closed down 43.5 points, or 0.8%, at 5262.1.</br></br>Before the market changed course, investors had been snapping up insurance stocks, encouraged by a spate of positive reports on the industry.