Stocks Slide On Euro Fears, Jobless Numbers

The stock market tumbled again on Thursday. The Dow Industrials fell 376 points, about 3.6 percent. The S&P fell even more, nearly 4 percent. There was continuing concern about fallout from Europe's debt crisis, but bad news on the U.S. job market added to Thursday's market problems. Robert Siegel talks to NPR's Jim Zarroli.

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MICHELE NORRIS, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.

ROBERT SIEGEL, host:

And I'm Robert Siegel. The troubles in Europe continue to take a big toll on the financial markets in this country. Stock prices fell today for the fourth straight day. The Dow and the S&P 500 indexes are now down more than 10 percent from their recent peaks, signaling what investors call a correction. NPR's Jim Zarroli joins us from New York.

And Jim, how bad was the damage in the markets today?

JIM ZARROLI: It was bad, and the amazing thing is it was really widespread. Of the 500 stocks in the S&P 500, all but three were down for the day. The Dow fell nearly four percent.

Now, keep in mind that until now, stocks have been climbing really far for a long time. They've been doing really well. Now in the space of about a month, all of the gains for the year have been wiped out. And if you look at some individual industries like financial stocks, they're down even more. So it's been a really sudden and scary turnaround.

SIEGEL: But we've been hearing for a while that the U.S. economy is improving. Why should trouble in Europe scare investors here so much?

ZARROLI: Well, actually, there were signs today that the U.S. economy might not be faring as well as we thought. First-time unemployment claims were up a lot last week. But it does seem to be mostly about Europe.

The fear is that because of this debt crisis, Europe could head back into a recession. And if you traveled in Europe at all lately, you know there are a lot of American companies that get a lot of revenue in Europe, companies like McDonald's, technology companies like Dell and Apple, companies like Boeing.

So they have a lot to lose if growth in Europe slows too much, and you're seeing that reflected in the stock market.

SIEGEL: But it seemed not too long ago that officials of the European Union and the International Monetary Fund took steps to address the debt crisis. They came up with a bailout package that equaled a trillion dollars. Why hasn't that calmed the markets down?

ZARROLI: You know, it came late, and I think there's just a lot of doubt about whether Europe can control the situation now, whether it even has the political will to attempt to do so. One of the things that happened this week was Germany banned a certain kind of short selling called naked short selling, and it did this unilaterally. It didn't try to get the other European countries to go along.

I talked to a trader today who said, you know, that raises questions about whether European countries are really working together. I think financial regulation in general is one of the things that's got investors pretty worried.

In this country, as you know, Congress is working on a bill to overhaul the markets, and this, you know, might turn into a good thing in the long run, but it has a lot of investors kind of worried and uncertain about the future. And they're pulling their money out of the markets until they know for certain a little bit more about what's going to happen.

SIEGEL: Okay, Jim, thank you.

ZARROLI: You're welcome.

SIEGEL: That's NPR's Jim Zarroli in New York.

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