Business

Foreigners’ debt woes, US job worries jolt stocks

On Wall Street yesterday, Greece was most certainly the word.

The European country, whose financial woes have put the investment community on tenterhooks for weeks, yesterday triggered a near panic as the threat of a possible debt default sent investors scrambling for safe but elusive havens.

Stocks dived worldwide, with the Dow Jones industrial average skidding nearly 270 points to break through the 10,000 mark briefly for its worst showing in nine months.

The Dow slid 268.37, or 2.61 percent, to 10,002.18. The Standard & Poor’s 500 index fell 34.17, or 3.11 percent, to 1,063.11, while the Nasdaq lost 65.48, or 2.99 percent, to 2,125.43. It was the worst single-day drop in the Dow since April 20, 2009.

Adding to the worries about Greece defaulting were the Portuguese government’s smaller-than-expected sale of treasury bills and word that Spain was raising its budget-deficit forecasts for the next two years. Closer to home, traders took little comfort from decent January retail sales, and instead focused on worse-than-expected weekly jobless claims data and what that might mean for today’s unemployment data.

Investors dumped positions in most major currencies — save the greenback — and bailed from their once-favored commodities such as oil, grains and other metals, all of which have been supporting much of the global market action lately. Crude oil tumbled 5 percent here to $73.14 a barrel, the steepest drop in six months.

Demand soared for safe US government securities. The 30-year bond jumped 117/32

in price to yield 4.55 percent, down from 4.64 percent the prior day. The benchmark 10-year Treasury note was up 25/32

to yield 3.61 percent, down from 3.71 percent the prior day.

The stronger bond prices could help Uncle Sam sell more bonds to investors to raise new cash while at the same time lowering its interest costs with the lower yields.

Analysts said most investors were concerned that Washington, along with central banks in Europe and Asia, would start pulling back the plentiful cash they spread around in the recent recovery moves.

Meanwhile, markets in Asia were also roiled. Japan’s Nikkei average fell almost 2.8 percent. Hong Kong’s Hang Seng Index slid 2.7 percent. Australia’s S&P ASX dropped 2.7 percent.

Europe’s troubles battered the euro to a new seven-month low against other major currencies. The dollar soared, which in turn reduced costs of dollar-priced commodities since fewer dollars would be needed to settle transactions.

Some investors were betting Europe’s basket-case economies could further weaken employment here. Some analysts believe today’s jobs report will show January unemployment rising to 10.1 percent from 10 percent the prior month.

The Labor Department said claims for unemployment benefits rose by 8,000 to 480,000 last week — the fourth increase in the past five weeks. paul.tharp@nypost.com