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U.S. stocks slide after India raises interest rates
Baltimore News.Net
Friday 19th March, 2010
Evidence of rallying economies in Asia were heightened Friday by India's central bankfor the first time in 20 months.
India raised its repurchase rate from 3.25% to 3.50%. The last time Indian rates were hiked was in July 2008.
The move highlights the imbalance of the global economic recovery with Asian nations recovering rapidly, while the U.S., U.K., and European economies struggle.
Most traders however saw the interest rate rise as a sign countries would soon start to wind back economic stimulus. Conversely though commodity prices fell Friday with oil leading the charge by falling below $80 a barrel.
"Keep an eye on the punch bowl,” Larry Kantor, head of research at Barclays Plc, told Bloomberg Radio before the rate rise announcement in India. Governments that stimulated their ecomonies by injecting capital and downsizing interest rates are “going to be withdrawing that stimulus,” he added. “That’s actually the big risk.”
At the close of trading Friday the Dow Jones Industrials were down for the first time in nine days. The benchmark index was off 37.19 points or 0.35% at 10,741.98.
The Nasdaq Composite was down 16.87 points or 0.71% at 2,374.41.
The Standard and Poor's 500 was down 5.92 points or 0.51% at 1,159.90.
The U.S. dollar was sharply higher. Around the New York close Friday the euro had retreated to 1.3536.
The British pound tumbled to 1.5016, while the Swiss franc weakened to 1.0600.
The Australian dollar slipped to .9156, while the Canadian dollar dipped to 1.0164.
The Japanese yen was little changed at 90.54.  Email this story to a friend
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