Because of new concerns that the global economy faces an extended downturn, worldwide shares have fallen sharply.

In the US, Dow Jones index closed Tuesday 177 points or 2% down to 8,694 and it was mainly due to poor results overnight from Starbucks.

Continuing fears over General Motors future also hit US investors confidence. Similarly, European and Asian shares also fell.

Oil prices, declining to 20-month lows, also kept falling.

On Tuesday trading, US light crude ended down $3.08 to $59.33 a barrel and it was the lowest price since March 2007. The demand of oil continued to fall due to slowing economy.

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Almost a 3 percent drop was noted in Dow Jones and Nasdaq indexes while London’s FTSE 100 index sank about 2.5% .Similarly, French and German markets each lost around 3%.

The results came forward when US data suggested mounting unemployment claims and sluggish shop sales.

The European Central Bank has shown 1.5% growth forecast in 2009, but now it cuts to 1.2%.

In the US, the jitters prompted after an ADP Employer Service report that showed 33,000 jobs cut during August. Weak sales during closely-watched back-to-school period also became the cause of anxiety in economic activities. …read the rest of this entry»