Troubled Spanish banks and North Korean saber-rattling have been added to the list of investor worries this week, leading to sharp losses in financial markets around the world.
Although stocks were recovering a bit Wednesday, markets in Hong Kong, Tokyo, Madrid and Paris all reported one-day losses of about 3% on Tuesday, the latest day of losses. In the U.S., the Dow Jones industrial average was down as much as 286 points before rebounding to finish down 22.82 at 10,043.75 Tuesday.
Despite Wednesday’s calm, the upheaval probably isn’t finished. “We’re in for a fairly unsettled period,” says John Ryding, chief economist at RDQ Economics.
On the Korean peninsula, tensions rose to the highest in years. North Korea’s official news agency said Pyongyang was cutting all ties to neighboring South Korea until President Lee Myung-bak, who earlier redesignated the north as his country’s “principal enemy,” leaves office in 2013. One day earlier, Lee had barred North Korean ships from South Korea’s territorial waters in retaliation for the North’s role in torpedoing a South Korean Navy warship on March 26.
Read More: – By David J. Lynch, USA Today