Dollar and U.S. stocks plunge
NEW YORK (Reuters) - The dollar slid to all-time lows against the euro on Wednesday and U.S. stocks sank as General Motors took its biggest quarterly loss ever, rattling investors already concerned about the U.S. economy.
Safe-haven gold rose to its highest level in nearly 30 years while oil closed in on $100 a barrel.
Losses at General Motors (GM.N), the largest U.S. automaker, came as the U.S. economy grappled with declines in the housing market and the fallout from the subprime mortgage crisis.
"There's a lack of support for the market," said Ernest Csak, vice president at Knight Equity Markets in Jersey City, New Jersey.
"I think oil could hit $100 as early as tomorrow. There's a lot of fear in terms of the weaker dollar, and there are subprime concerns. When you see $100 oil, I think the consumer is going to overreact and cut back, and that's going to impact the market" and the economy.
The Dow Jones industrial average .DJI was down 174.12 points, or 1.27 percent, at 13,486.82. The Standard & Poor's 500 Index .SPX was down 20.85 points, or 1.37 percent, at 1,499.42. The Nasdaq Composite Index .IXIC was down 39.32 points, or 1.39 percent, at 2,785.86.
In the currency market, the euro surged to a lifetime high at $1.4730 against the dollar, according to Reuters data. It last traded at $1.4662, up 0.7 percent on the day.
The dollar index, which measures the dollar's value against a basket of six currencies, touched a record low of 75.077 .DXY, down around 10 percent since the start of 2007. By midday, the index was at 75.400, down about 0.8 percent from late on Tuesday.
The greenback was pressured by comments from a Chinese official, which stoked fears that the central bank of the world's fourth-largest economy would reduce its holdings of U.S. assets.
A Chinese central banker said the dollar was losing its status as the major global currency, and a top lawmaker said China should balance the make-up of its $1.43 trillion stockpile of foreign reserves to take advantage of appreciating currencies.
Expectations for further interest-rate cuts by the Federal Reserve also weighed on the dollar as they would erode the yield that the currency offers.
"It's a mountain of negative sentiment for the U.S. currency. Comments from China overnight added to the dollar's already negative tone," said Omer Esiner, foreign-exchange analyst at Ruesch International in Washington.
"You also have concerns about the health of the U.S. economy, the possibility for lower lending rates and the subprime mortgage concerns."
SHORT-TERM DEBT, OIL AND GOLD RALLY
In the bond market, U.S. Treasuries jumped in a volatile trading session marked by sharply lower stocks, a plunging dollar and record high oil prices. Continued...
