Stocks nose-dived on Wall Street today, with the Dow Jones Index closing at 1033 points down, for a 2.6% drop, the worst in two years. The Nasdaq Composite lost a daily 3.43%, after dropping last Friday. In Japan the Nikkei plunged more than 12%, the worst one-day loss since Black Monday in 1987.
Meanwhile in Europe stock markets also plunged upon opening. Shares fell more than 3% in Frankfurt, Germany while the Paris market lost 2.6% and London fell 2.3%. Milan plunged 4% and Madrid 2.8%.
There were several triggers to the last two days’ stock market ructions. There was the bad U.S. jobs/unemployment report for July, released on Friday Aug. 2 (the United States economy having been the Great White Hope as the main European economies sank). There was the sudden spike in the Japanese yen relative to the dollar, roughly from the range of 160/dollar to low 140s/dollar. This may not be a cause so much as the result of mass closing of yen carry trades, forced by losses in other trades in Europe and the United States.
