Business News

NEW YORK, (APP/AFP) – US stocks dived Friday after Britain’s surprise vote to leave the European Union, joining a global equity rout
amid rising uncertainty about the future of Europe.
The Dow Jones Industrial Average slumped 3.4 percent to 17,400.75. The 610-point drop was the index’s biggest single-day point loss in nearly five years.
The broad-based S&P 500 plunged 3.6 percent to 2,037.30, while the
tech-rich Nasdaq Composite Index sank 4.1 percent to 4,707.98.
Although the losses were broad-based in the US, sectors that were
especially hard-hit included banking, energy, travel and industrials.
The unexpected British decision also reverberated through other financial markets, slamming the British pound and boosting gold.
Economists expect weaker global growth, and especially a slowdown in
Europe, and a higher risk of recession in Britain. Analysts also expect a hit to the US economy, although not as great as in Europe.
“This was really an event that caught most global investors flat-footed,” said Jack Ablin, chief investment officer of BMO Private Bank.
“We’re going to see more days like today as the collective wisdom may prove wrong in others cases, too.”
Among large banks, Citigroup plunged 9.4 percent and Morgan Stanley 10.2 percent. Bank of America, JPMorgan Chase and Goldman Sachs all lost 7.0 percent or more.
Large US banks have made London their European headquarters and are
expected to face costs associated with retooling their operations.
Gold producers were a rare bright spot as investors flocked to the
traditional haven of the gold metal, pushing prices sharply higher. Barrick
Gold jumped 5.8 percent, Newmont Mining 5.1 percent and Goldcorp 4.4 percent.
Travel, airline and hotel stocks sank, with American Airlines plummeting 10.8 percent, Priceline 11.4 percent and Marriott International 7.3 percent. Analysts worry that travel could be curtailed due to the political and economic uncertainty surrounding Britain and the EU.
Technology shares suffered, with especially ugly falls for Cisco Systems, down 5.0 percent; eBay, 6.9 percent; and NXP Semiconductors, 8.3 percent. Apple fell 2.8 percent and Microsoft 4.0 percent.
Petroleum-linked shares tumbled on lower oil prices, with Halliburton
losing 4.2 percent, ConocoPhillips 5.4 percent and Apache 5.7 percent.