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US markets slumps amid waning confidence over Europe’s debt plan

01 Nov 2011 Evaluate

The US markets slumped on Monday, amid waning confidence over Europe’s plan to contain the region’s debt crisis. The markets ended sharply lower at the end of the session, trimming the biggest monthly advance since 1991 for the Standard & Poor’s 500 Index, on concern that European leaders will struggle to raise funds to contain the region’s sovereign debt crisis. In the US, ahead of a national gauge slated for release on Tuesday, the Institute for Supply Management reported its Chicago business index fell to 58.4 this month from 60.4 in September, with the latest reading slightly under expectations. Besides, MF Global filed for bankruptcy protection after the deal with Interactive Brokers fell apart. The securities broker is the first casualty in the US from the collapse in the sovereign bonds in Europe.

Meanwhile, the Organization for Economic Cooperation and Development revised its outlook lower for the economy in the European region. The economic growth estimate for the year 2012 was lowered to 0.3% from the previous estimate of 2%. The statistics agency of the European region, eurostat stated inflation in the 17-member euro zone was steady at 3%, higher the target set by the European Central Bank.

The Dow Jones industrial average lost 276.10 points, or 2.26 percent, to 11,955.00. The Standard and Poor’s 500 closed lower by 31.79 points, or 2.47 percent, to 1,253.30, while the Nasdaq composite lost 52.74 points, or 1.93 percent, to 2,684.41.

The Indian ADRs closed mixed on Monday, ICICI Bank was down by 1.72%, Infosys Technologies was down by 1.65%, Dr. Reddy’s Lab was down by 1.42% and Tata Motors was down by 1.29%,while MTNL was up by 0.01%.

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