The Australian stockmarket has recovered from a weak opening to be trading marginally higher before noon.
The local bourse opened 1% lower this morning after another horror night in foreign bourses. But firm company earnings reports have helped the S&P / ASX 200 recover. It was trading up seven points, or 0.16% at 4,148 at 1140 AEST today.
US stocks plummeted over four per cent on Wednesday, more than wiping out a rebound as European debt troubles and worries of a new US recession kept investors nervous.
The Dow Jones Industrial Average closed down 519.83 points (4.62 per cent) to 10,719.94, reversing its 430-point gain on Tuesday.
The broader S&P 500 fell 51.77 points (4.42 per cent) to 1,120.76.
Meanwhile, the tech-heavy Nasdaq was uncharacteristically a better anchor for the markets overall, losing just 4.09 per cent, or 101.47 points, to 2,381.05.
That was driven mainly by Apple, which only lost 2.76 per cent for the day and ended up for the first time after the closing bell as the world’s largest company by market capitalisation, at $342.4 billion, surpassing ExxonMobil’s $338.3 billion.
With investors seeking safety, bond yields continued to fall, though remaining just above the all-time lows briefly touched in intraday trade Tuesday, when the 10-year hit 2.035 per cent.
Gold hit another record, of $1,797.00 an ounce, before dropping back to the $1,790 level around 2030 GMT.
After their devastating Monday plunge, the markets had rebounded solidly Tuesday when the Federal Reserve said it would keep interest rates at ultra-low levels for two more years to aid the stalling economy.
But more worries over weakness set, especially after cracks appeared in Greece’s latest bailout package and France began looking frail, with rumours abounding that the country, and possibly its banks, would also be downgraded as the United States was on Friday.
That sent Europe’s markets plunging, and the effect spilled over across the Atlantic.
The Dow “nullified Tuesday’s gains today, as revived concerns about the fiscal fate of Europe kept the major market indexes swimming in red ink,” said Andrea Kramer of Schaeffer’s Investment Research.
“With Uncle Sam’s notorious credit-rating downgrade still fresh on traders’ collective mind, the threat of a similar downgrade for France only reopened Wall Street’s proverbial wounds,” she said.
As in Europe, banks again pulled the markets down.
Bank of America dropped 10.9 per cent, Citigroup lost 10.5 per cent and Goldman Sachs 10.1 per cent.
Among other blue chips, American Express and Boeing both lost more than 7.0 per cent and Walt Disney gave up 9.1 per cent after reporting fiscal third quarter earnings that, while beating estimates, left analysts concerned about future growth.
Closing yields for Treasuries were barely above the historic lows of mid-December 2008, in the middle of the US financial crisis.
The 10-year Treasury bond dropped to 2.09 per cent from 2.18 per cent late Tuesday, while the 30-year Treasury fell to 3.49 per cent from 3.57 per cent.
