U.S. stocks ended lower on Tuesday as mounting fears about Japan's escalating nuclear crisis sparked sell-offs in financial markets around the world, but positive remarks from the Federal Reserve helped the indexes rebound from the day’s lows.
The Dow Jones industrial average was down 137.74 points, or 1.15 percent, at 11,855.42. The Standard & Poor's 500 Index was down 14.52 points, or 1.12 percent, at 1,281.87. The Nasdaq Composite Index was down 33.64 points, or 1.25 percent, at 2,667.33.
Radiation levels rose in Tokyo and some surrounding areas on Tuesday after the nuclear accident at the Fukushima No. 1 nuclear power plant in northeastern Japan, according to local governments. The amount was believed to be about twenty times higher than normal.
Equities nearly halved their losses after the Fed stuck with its ultra-loose monetary policy and said the economic recovery is on a firmer footing, and overall conditions in the labor market appear to be improving gradually.
The Fed also said that it would continue its 600-billion-dollar government bond-buying program as scheduled, and keep interest rates at very low levels for an extended period.
On the economic front, manufacturing activity in New York State expanded more than expected in March, reaching the highest levels since June 2010. The index showing general business conditions in New York State increased to 17.5 points in January, up 2 points from February.
On corporate front, Shares of General Electric Co. (NYSE:GE) shares declined 1.56 percent to $19.61. The company designed all six of the reactors at the Fukushima Daiichi nuclear plant in Japan.
Among the uranium companies, Denison Mines Corp. declined 7.05 percent and Cameco Corp. declined 0.15 percent, while Uranium Resources plunged 9.71 percent.
The euro declined 0.08 percent to 1.3986 against the dollar and the yen declined 0.21 percent against the greenback.
Crude oil futures advanced 0.46 percent to $97.63 a barrel and gold futures gained 0.27 percent.
European stock markets declined to 3-1/2 month closing low on Tuesday, after Tokyo shares plunged more than 10 percent amid fears of a nuclear disaster in Japan.
The Stoxx Europe 600 Index declined 2.27 percent to 266.32. DAX30 declined 218.97 points or 3.19 percent to 6,647.66, CAC 40 fell 97.19 points or 2.51 percent 3,780.85 and the FTSE 100 declined 79.96 points or 1.38 percent to 5,695.28.
Germany’s biggest utilities E.ON AG declined 3.9 percent to 20.805 euros and RWE AG fell 3.95 percent to 43.28 euros, while French nuclear engineering group Areva SA plunged 8.55 percent to 28.8 euros.
Close Brothers Group Plc declined 2.38 percent after the company reported first half net income of 14.6 million pounds compared to 14.6 million pounds in the same period last year.
Electricite de France SA declined 1.38 percent to 28.56 euros after the company stock was downgraded to “sell” rating from “buy” rating at Aurel BGC.
On the economic front, German economic sentiment fell unexpectedly in March, as the expectations were hit by hawkish stance of the European Central Bank (ECB) and a major earthquake in Japan. The ZEW Indicator of economic sentiment for Eurozone’s largest economy dropped 1.6 points to 14.1 points in March, from 15.7 points in February.
Meanwhile, the number of employed people in the eurozone rose in the last quarter of 2010, as hiring increased in the agriculture and financial services sectors. The employment rate in the region increased 0.1 percent in the fourth quarter last year compared with the previous quarter.
Asian stock markets ended sharply lower on Tuesday, with Japanese stock markets slumped for the second day on escalating fears of a nuclear crisis after a radiation leak was detected at the Fukushima Daiichi nuclear plant and residents were warned to stay indoors.
Japan's prime minister Naoto Kan said on Tuesday that radioactive levels had become high around a nuclear power plant damaged by the nation’s biggest earthquake, and there was a risk of radiation leaking into the atmosphere. Kan urged people within 30 km (18 miles) of the facility north of Tokyo to remain indoors and the French embassy in the capital warned in an advisory that a low level of radioactive wind could reach Tokyo within 10 hours.
Benchmark Nikkei index slumped 10.55 percent or 1,015.34 to 8,605.15 after plunging 6.18 percent in the previous session. Meanwhile the Topix index plunged 9.47 percent to 766.73 and recorded its worst two-day slump since 1987.
Shares of Tokyo Electric Power, Japan's biggest utility and operator of the Fukushima nuclear-power plant which suffered an explosion to its No. 3 reactor building after the earthquake, slumped 24.76 percent to 1,221 yen.
Among auto makers, Nissan Motor declined 3.32 percent to 698 yen and Honda Motor declined 3.9 percent to 2,974 yen, while Toyota Motor plunged 7.4 percent to 3,065 yen after halting production at almost all of their domestic plants.
Japanese exporters were also affected as yen strengthened against all of its major counterparts as Japanese firms, including insurance companies, bought back their home currency in order to fund the country's reconstruction. The yen strengthened to 81.54 per dollar in Asian trade.
Among the worst performers, Toshiba Corp plunged 19.46 percent and Hitachi slumped 12.5 percent, while Sumitomo Metal Industries plunged 15.93 percent.
Hong Kong’s Hang Seng index plunged 761.54 points or 3.26 percent to 22,584.34 and Chinese Shanghai composite declined 2.07 percent or 60.93 points to 2,876.70. China Coal Energy declined 2.86 percent and Shandong Gold-Mining declined 3.28 percent, while Zijin Mining fell 3.82 percent.
South Korean shares ended lower, led by declines from technology and steel producers companies. Seoul composite declined 47.31 points or 2.40 percent to 1,923.92. Samsung Electronics declined 4.44 percent and LG Electronics fell 3.33 percent, while POSCO fell 3.48 percent.
More from IBT Markets:
Newsletter: To receive Global Markets update, sign up here