US stocks drop, attention returns to weak economy - KFVS12 News & Weather Cape Girardeau, Carbondale, Poplar Bluff

US stocks drop, attention returns to weak economy

NEW YORK (AP) - Stocks are finishing the day with sharp declines, as investors turn their attention back to the weak economy. The Dow has lost more than 500 points today.

As for yesterday's late-afternoon surge that saw the market finish with solid gains, investors and analysts say that was probably just a blip caused by computerized trading.

An analyst says the focus now is on "the fundamentals" of the economy.

In addition to concerns about economic growth in the U.S., there are also a lot of worries about Europe, and whether Italy and Spain may be the next countries unable to repay their debts.

The Federal Reserve yesterday pledged to keep its key interest rate at nearly zero into 2013. But the Fed's statement also included a dim outlook on the economy. It said growth has been "considerably slower" than it expected and that it anticipates a slower pace of recovery.

Shares in French banks plummeted in mid-afternoon trading on the Paris stock exchange on renewed market worries over France's bond rating and the European debt crisis.

Copyright 2011 The Associated Press. All Rights Reserved.

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