Markets fall on contamination fears
Jun 02 2012
World stock markets have tumbled amid fears the stricken eurozone is contaminating powerhouse economies in the United States and China.
The weakest US jobs growth in a year, and figures showing expansion in China's manufacturing sector almost ground to a halt last month, dashed hopes that the world's two largest economies will ride out the euro storm.
And further evidence that the crisis is derailing the UK economy was delivered in dire manufacturing figures showing the second sharpest fall in activity in the 20 years of the Markit/CIPS survey.
In the US stock markets fell after figures showed that employers created only 69,000 jobs in May, the fewest in a year. With unemployment rising as well, President Barack Obama had to concede that America's economy was not creating jobs "as fast as we want". But he stressed the economy would improve, saying: "We will come back stronger. We do have better days ahead."
The benchmark Dow Jones closed down 275 points, the biggest fall since November, and the S&P 500 and Nasdaq were both lower.
In London the FTSE 100 fell 60.7 points to 5260 and declines were even heavier on markets in Germany and France, with the Dax down 3% and the CAC 40 off 2%.
The gloomy report about the UK manufacturing from Markit said the collapse to a three-year low reflected the increasing weakness of the UK domestic market, with overall order books shrinking at a faster rate than export orders.
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