U.S. stocks sink to 5-1/2 year lows
By Herbert Lash
NEW YORK (Reuters) - U.S. and European shares ended at five-and-a-half-year closing lows on Wednesday as a record drop in U.S. consumer prices and more dismal housing data stoked recession fears, driving a flight to safety.
Doubts about the prospect of a U.S. auto industry rescue added to America's weak economic outlook, further weighing on stocks and helping push the dollar down against the yen.
All three major U.S. indexes -- the Dow, S&P 500 and Nasdaq -- posted their lowest closes since early 2003, while MSCI's all-country world index also slipped to lows last seen more than five years ago.
The S&P and Nasdaq fell more than 6 percent, the Dow shed more than 5 percent and the MSCI index lost about 4.7 percent.
All 30 components of the Dow closed lower, while in the S&P only seven stocks rose out of the index's 500 companies.
Shares of the three largest U.S. banks -- JPMorgan Chase, Citigroup, and Bank of America -- posted double digit percentage drops to multiyear lows on expectations that a worsening economy and credit conditions will weigh heavily on them.
Oil fell below $54 to 22-month lows after an unexpectedly large build in U.S. crude inventories underlined falling demand in a rapidly deteriorating economy.
Debt prices on both sides of the Atlantic rose on signs of fading inflation after the U.S. government reported a 1 percent drop in consumer prices in October -- the biggest drop since the Labour Department began monthly records in 1947. Continued...
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