Stock futures drop as Japan crisis worsens

By @ibtimes on

Stock index futures dropped sharply on Tuesday, with futures for the S&P 500 down 2.8 percent, Dow Jones futures down 2.5 percent and Nasdaq 100 futures down 2.6 percent at 0935 GMT (5:35 a.m. ET), on mounting fears over Japan's nuclear crisis.

A Japanese nuclear power plant sent low levels of radiation floating toward Tokyo, prompting people to flee the capital and others to stock up on essential supplies.

Japanese stocks plunged 10.6 percent, posting the worst two-day losing streak since 1987 on reports of rising radiation near Tokyo, suggesting any deterioration at a quake-hit nuclear plant could trigger more panic selling led by hedge funds.

European stocks dropped 3.4 percent in morning trade, led by shares of nuclear-related utilities, luxury groups and assurance companies, while mining shares dropped along with metal prices.

Brent crude fell as much as 2.2 percent to below $112 while U.S. crude dropped 2 percent to below $100 a barrel.

Investors were also rattled by news Saudi Arabia sent troops into Bahrain on Monday to help calm weeks of protests by the Shi'ite Muslim majority, a move opponents of the Sunni ruling family on the island called a declaration of war.

Prices for key technology components extended gains on Tuesday, as damage at Japanese plants and infrastructure caused by Friday's earthquake threatened to disrupt the global manufacturing chain longer than many had expected.

Dozens of Japanese firms from component makers to electronics firms and automakers were keeping their plants shuttered, while damage to infrastructure including power, roads, rails and ports will take months to repair.

Texas Instruments warned on Monday of lost revenue from two semiconductor plants in Japan following the country's biggest-ever earthquake.

U.S. stocks fell on Monday, but other than specific industries such as nuclear power, the broad impact on equities was expected to be short-lived.

The Dow Jones industrial average closed down 51.24 points, or 0.43 percent, at 11,993.16. The Standard & Poor's 500 Index

was down 7.89 points, or 0.60 percent, at 1,296.39. The Nasdaq Composite Index was down 14.64 points, or 0.54 percent, at 2,700.97.

(Reporting by Blaise Robinson; Editing by Dan Lalor)

Join the Discussion