(Recasts with U.S. markets, adds byline; changes dateline;
previous LONDON)
By Herbert Lash
NEW YORK, Oct 16 (Reuters) - U.S. stocks turned lower on
Thursday after a business activity slumped in a regional survey
for October, while oil and other commodity prices fell on
growing fears of a global recession.
Government bond futures rebounded after a report showed
U.S. Mid-Atlantic factory activity crashed to an 18 year low in
October, adding to the toll the global credit crisis has taken
on economic growth.
The U.S. dollar pared gains on the data, U.S. stocks fell
more than 2.0 percent and European stocks extended losses, with
key indexes down more than 4.0 percent.
Fear of slowing global economies slammed commodity prices.
Copper fell almost 8.0 percent to a 33-month low, gold tumbled
more than 5.0 percent and crude oil slid to a new 13-month low
near $71 a barrel, less than half its July peak of more than
$147.
"It is one for the record books, or just about," Chris
Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi
UFJ in New York, said of the factory activity report.
"It is a sign that the economy is falling away quickly, and
it is certainly consistent with the recession that we seem to
be in," Rupkey said.
In early morning trade, the Dow Jones industrial average
<> was down 188.21 points, or 2.19 percent, at 8,389.70.
The Standard & Poor's 500 Index <.SPX> was down 22.02 points,
or 2.43 percent, at 885.82. The Nasdaq Composite Index <>
was down 32.33 points, or 1.99 percent, at 1,596.00.
Declines were beating advancing stocks on the New York
Stock Exchange by almost 3 to 1.
The economic data overshadowed a decline in most of the
short term lending rates overnight, indicating that efforts by
the central banks to loosen up credit may be working in the key
short-term market.
Fresh signs of a looming worldwide economic slowdown let
Japan's Nikkei <> suffer its worst one-day losses since
the stock market crash of October 1987.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 2/32 in price to yield 3.96 percent , while the 2-year
U.S. Treasury note <US2YT=RR> fell 1/32 in price to yield 1.56
percent.
The U.S. dollar rose against a basket of major currencies,
with the U.S. Dollar Index <.DXY> up 0.40 percent at 82.59.
The euro <EUR=> fell 0.49 percent at $1.3394, and against
the yen, the dollar <JPY=> was up 0.96 percent at 100.55.
U.S. light sweet crude oil <CLc1> fell $1.95 to $72.59 a
barrel.
Spot gold prices <XAU=> fell $48.30 to $799.70 an ounce.
(Reporting by Ellis Mnyandu, Ellen Freilich, Steven C. Johnson
in New York and Joe Brock, Peter Blackburn and Jan Harvey in
London
(Writing by Herbert Lash)
