New York - Arabstoday
World stocks and the euro tumbled yesterday on worries over Europe\'s festering debt problems as the stakes intensified for the world\'s top finance officials to find ways to prevent the crisis from worsening. The euro hit 6-1/2 month lows against the dollar and the yen, with more declines likely after the European Central Bank (ECB) shifted away from further rises in interest rates, a key driver in the single currency\'s rally this year. Nervousness over the outcome of a Greek debt swap deal fuelled safe-haven buying of German and US government debt. The swap deal is critical for Athens to secure a second bailout and avert a near-term default that could ripple across the region and the global banking system. \"Europe is the No 1 thing causing pressure on the market as the realisation grows that what we\'ve done so far hasn\'t worked,\" said Liz Ann Sonders, the New York-based chief investment strategist at Charles Schwab, which has $1.65 trillion (Dh6.05 trillion) in client assets. Divisions within the ECB on the handling of Europe\'s debt woes boiled over yesterday. Reuters reported board member Juergen Stark will resign because of a conflict over its controversial bond-buying programme. The ECB later confirmed Stark will step down at the end of the year. With that as a backdrop, finance ministers and central bankers from the Group of Seven industrialised nations were to meet in Marseille later in the day. Meeting host France has called for a coordinated response from G7 members to deal with Europe\'s debt crisis and the region\'s shaky banks. In the US, President Barack Obama on Thursday night unveiled his $447 billion plan to revive economic growth. But investors worried Congress would hold it up and the Federal Reserve may not follow quickly enough with its own action. At 11:30am EDT (1450 GMT), the Dow Jones industrial average was down 239.31 points, or 2.12 per cent, at 11,056.50. The Standard and Poor\'s 500 Index was down 23.91 points, or 2.02 per cent, at 1,161.99. The Nasdaq Composite Index was down 38.91 points, or 1.54 per cent, at 2,490.23. Top European shares were off 1.7 per cent, and the MSCI world equity index was off 1.8 per cent. The FTSEurofirst 300 index and the MSCI world gauge were down 2.7 per cent on the week. Another retreat in equities boosted safe-haven German and US government bond prices. The 10-year Bund yield touched an all-time low of 1.782 per cent, while the benchmark 10-year US yield was last 1.95 per cent, not far from a 60-year low of 1.9080 per cent set on Tuesday. The euro was last down 1.2 per cent against the dollar at $1.3699, its lowest in six and a half months.