Stocks markets in the US, Europe, South America and the Asia-Pacific are all tumbling, fueled by fears of a global recession.
The outlook for global economic growth appears dim, due to bad news from a number of fronts. In the US, factory activity in the Mid-Atlantic region fell, while US home sales unexpectedly fell in July and new claims for jobless benefits grew more than expected. In Europe, fears that the debt crisis could infect the region’s financial system resurfaced, also US federal and state regulators’ scrutiny of the US arms of Europe’s banks and some European banks’ higher interest rates for US dollar loans, led to worries about spillover of Europe’s debt crisis into the US banking system. The decreasing global consumer demand and markets contagion led to other markets’ falls.