Global Stocks Fall

Stocks tumbled around the world and the dollar slumped after the Senate rejected a bailout for American automakers, threatening to deepen the global recession. Treasuries rallied and yields fell to record lows.

The MSCI World Index lost 1.8 percent to 876.62 as of 8:06 p.m. in New York after senators voted down a bill to provide $14 billion of emergency funds for General Motors Corp. and Chrysler LLC. GM plunged 37 percent, while Honda Motor Co. and Daimler AG sank more than 8 percent. The dollar fell to a 13-year low against the yen and the cost of protecting corporate bonds against default soared. Metals and crude oil slumped.

Standard & Poor’s 500 Index futures sank 4 percent, indicating the benchmark for U.S. equities will extend yesterday’s 2.9 percent drop. Europe’s Dow Jones Stoxx 600 Index lost 4.5 percent, while the MSCI Asia Pacific Index fell 3.7 percent.

The MSCI Emerging Markets Index lost 3.6 percent, extending its 2008 drop to 56 percent. China’s CSI 300 Index sank 4.2 percent after a government official said growth will slow more sharply next quarter.

The MSCI World Index of 23 developed markets has slid 45 percent this year as almost $1 trillion in bank losses and writedowns froze credit markets and pushed the U.S., Europe and Japan into the first simultaneous recessions since World War II. Spending plans by governments from the U.S. to Australia spurred a 14 percent rally in the index since Nov. 20.

Japan’s Nikkei 225 Stock Average retreated 5.6 percent to 8,235.87. The CSI 300 Index sank 3.8 percent in China, after a government official said growth will slow more sharply next quarter. South Korea’s Kospi Index lost 4.4 percent, led by KB Financial Group Inc., after the Bank of Korea said the economy will expand at the slowest pace in 11 years in 2009.,
12/12/2008 5:29:51 AM