Global stock market indexes were hit hard on Tuesday after financial concerns in the United States spread to other shores.
In Europe, the U.K.'s FTSE 100 and Germany's DAX index each fell 1.9 per cent in afternoon trading. In Asia, Japan's Nikkei 225 fell 2.3 per cent in overnight trading.
Meanwhile, U.S. stock index futures suggested another down day closer to home. Futures for the Dow Jones industrial average sank 59 points, to 11,440, with about an hour before trading begins. Futures for the broader S&P 500 fell 7 points, to 1275.
You certainly can't blame the recent setbacks on crude oil. Although tropical storm concerns gave oil a temporary bounce early Monday, the price of crude continued to weaken once those concerns subsided: It traded at $112.07 (U.S.) a barrel on Tuesday, down 80 cents. Gold, which has followed oil's course in recent weeks, fell to $790.50 an ounce, down $9.57.
The U.S. housing market, at least in a direct way, also can't be blamed. Housing starts for July fell 11 per cent - ugly, yes, but also in line with expectations.
On the retail end of things, the picture also looks familiar. Home Depot Inc. reported its second quarter results on Tuesday, and although net income fell 24 per cent, to $1.2-billion or 71 cents a share, the results were better than analysts had been expecting. The home improvement retailer maintained its full-year outlook.
More likely, investors remain rattled by the prospect of more writedowns at financial institutions and some of the larger unknowns surrounding the health of mortgage finance companies Fannie Mae and Freddy Mac. These concerns were underscored by a report from JPMorgan Chase & Co. analysts, which suggested that Lehman Brothers Holdings Inc. may have to write down $4-billion in credit-related investments in the third quarter. Overseas, Barclays PLC and Societe Generale SA were among the big losers.