Markets

US stocks continue slide on China inflation concerns

(Xinhua)
Updated: 2010-11-13 10:17

NEW YORK - US stocks continued its slide on Friday on speculations that China might take further monetary-policy tightening steps to counter inflation challenges.

Major indexes were off session lows when market closed, but still deeply mired in negative territory.

The Dow Jones industrial average fell 90.52, or 0.80 percent, to 11,192.58. The Standard & Poor's 500 index dropped 14.33 points, or 1.18 percent, to 1,199.21 and the Nasdaq was down 37.31 points, or 1.46 percent, to 2,518.21.

Related readings:  Rising food costs boost China's inflation rate to 25-month high  Expert: China has no inflation problem  China may face more inflation pressure in 2011: Analyst  Gold drops on China interest rate hike rumor, stronger dollar

Commodities and precious metals also got a heavy blow as investors believed a slowdown in China's economy will erode demand for commodities.

Gold futures for December delivery fell $37.80, or 2.7 percent, to settle at $1,365.50 per ounce, the biggest drop since July 1, while oil fell 3.3 percent, the most in more than three weeks, to end at $84.88 a barrel on the New York Mercantile Exchange.

Friday's slide came after a latest report from China's National Bureau of Statistics showed that the country's consumer price index hit a 25-month higher of 4.4 percent in October. Analysts broadly anticipated that the whole year CPI in China will stand at about 3.1 percent, which is higher than the government's target ceiling for the year.

Stocks also slumped on Friday in China, with the benchmark Shanghai Composite index tumbling 5.2 percent, its biggest drop in 14 months.

Meanwhile, worries about the European debt problems continued to weigh on the market. There are mounting speculations that the debt problems in Ireland have been out of control and the government will have to ask for international aid, just as Greece did early this year.

On economic news front, the Thomson Reuters/University of Michigan's preliminary November reading on consumer sentiment came in at 69.3, the highest level since June, but it failed to boost sentiment.