Markets Fear End of Stimulus; Global Stocks Sink on Worries Central Bankers in Europe, U.S. Won't Act Further
Fears that the central banks of Europe and the U.S. may soon end efforts to support financial markets and fresh concerns about the health of Europe's weakest countries drove down stock markets around the world Wednesday.</br></br>European Central Bank President Mario Draghi indicated he would be hesitant to undertake more monetary easing, citing concerns about inflation. That surprised investors who had been relying on the ECB to help support the region's economy and financial markets.</br></br>Adding to concerns, an auction Wednesday of Spanish government bonds was met with surprisingly lackluster demand. The disappointing sale was a reminder to investors that Europe's problems are far from over, and prices of European sovereign bonds fell, sending yields higher. The euro also dropped against the dollar.</br></br>Stock indexes from New York to Frankfurt to Tokyo fell sharply. The Dow Jones Industrial Average fell 124.80 points to 13074.75, its worst day since March 6. In Germany, the DAX index dropped 2.8%, its biggest one-day fall in a month. Japan's Nikkei Stock Average tumbled 2.3%, its worst day since Nov. 10.</br></br>The slide began in the U.S. Tuesday after signs from the Federal Reserve that it won't immediately embark on a new round of bond buying. That dashed hopes of investors who had anticipated a new program would further juice financial markets and the economy.