US stocks slide amid rising borrowing costs

May 28th, 2009 - 5:26 am ICT by IANS  

New York, May 28 (DPA) US stocks fell sharply Wednesday amid a spike in long-term government bond prices, which could drive up the cost of borrowing in the wider US economy.
The yield on 10-year Treasury bonds climbed to 3.73 percent, its highest level since November, despite efforts by the US Federal Reserve to keep yields down and encourage investment in the private sector.

Financial shares declined after a US government agency said the number of US banks threatened by collapse jumped dramatically in the first quarter.

The Federal Deposit Insurance Corporation put 305 banks on its “red list” of endangered lenders, the highest number in 15 years.

General Motors’s share price plunged another 20 percent to $1.15 after its bondholders rejected an offer to settle their debt, which is nearly certain to force the ailing US carmaker into bankruptcy by Monday.

The blue-chip Dow Jones Industrial Average fell 173.47 points, or 2.05 percent, to 8,300.02. The broader Standard & Poor’s 500 Index fell 17.27 points, or 1.9 percent, to 893.06. The technology-heavy Nasdaq Composite Index was down 19.35 points, or 1.11 percent, to 1,731.08.

The US currency gained against the euro to 72.08 euro cents from 71.49 euro cents. The dollar rose against the Japanese currency to 95.29 yen from 94.99 yen.

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