U.S. Stocks Beaten, but Not Broken, by Brazil --- Brazil's Index Falls 5.1%, Jars World Markets
Brazil rocked the world's markets, as news of a devaluation of its currency and the resignation of the country's centralbank president raised the specter of renewed financial-market turmoil in the region.</br></br>Yesterday's surprise action widened the band within which the Brazilian currency, the real, trades. That sent the real down more than 8% against the dollar, and international investors fear there is considerable risk of further devaluation, which could hammer Latin American stocks and bonds again.</br></br>Brazil's main stock-market index, the Bovespa, initially plummeted nearly 11%, before ending the day down 5.1%, or 299 points, at 5917, in moderate volume. But the steep opening drop dragged other Latin American markets sharply lower and delivered a blow to the European stock markets, many of which closed down more than 3%.</br></br>Argentina tumbled 10.2%, Mexico dropped 4.6% and Venezuela dropped 3%. Meanwhile in Europe, where the markets were still open when the devaluation and resignation news emerged, Spain dropped 6.9%, Italy dropped 4.1%, France 3.5%, Germany 4.1% and London 3%.</br></br>Asian markets, which had already closed when Brazil made its announcements, were hit by their own domestic concerns as well as the slide in the U.S. market Tuesday. Further revelations about bad loans in China weighed on the Hong Kong market, which fell 4.1%, while Singapore shed 2% and Thailand fell 3.6%. The firmer dollar gave support to Japan's stock market, which rose 0.3%.