Share prices around the world fell sharply yesterday, partly due to the decision by the European Central Bank not to cut interest rates, but also due to latest economic figures which show that the deterioration in the US economy is accelerating.
The US employment cost index rose by a seasonally adjusted 1 per cent, higher than the market had expected.
More significantly, orders for durable goods plunged by 8.5 per cent in September, an indication that the economy has weakened sharply since the September 11th attacks. "We do not feel the depressed drop is a stunning surprise," said Mr Dick Rippe, of Prudential Securities, "but the question is . . . do we recover it?"
Markets in Europe had been weaker even before the publication of the durable goods figures. But prices fell further once Wall Street opened, with a sharp fall as investors factored the figures into forecasts. The heaviest losses were concentrated on technology stocks.
The Nasdaq Composite Index closed up 43.93 points on 1,775.47, while the Dow rose 117.28 to 9,462.90. Earlier, European markets fell by 1 to 2 per cent.
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