Stocks moved sharply lower at the start of trading on Friday, as traders expressed concerns about the impact of the financial crisis in Dubai. The major averages all showed notable declines, with the Dow giving back some ground after ending the previous session at a one-year high.
The initial weakness comes after Dubai World, the main investment arm of Dubai, asked to postpone payment on some of its $60 billion in debt. Worries about a default by the city-state have raised significant concerns about the impact on banks.
The news has contributed to substantial weakness in overseas markets that has carried over into the U.S. markets. Light volume on Wall Street amid a holiday-shortened session may have helped to exaggerate the extent of the downward move.
Resource stocks have helped to lead the way lower, as concerns about the crisis in Dubai have contributed to a sell off among commodities. Most of the other major sectors have also come under pressure, with health insurance, semiconductor, and airline stocks posting steep losses.
In the past few minutes, the major averages have edged up off their lows for the young session, but they remain firmly in the red. The Dow is currently down 213.12 at 10,251.28, the Nasdaq is down 49.82 at 2,126.23 and the S&P 500 is down 25.51 at 1,085.12.
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