Date registered: Dec 2005
Location: United States
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Asian Stocks, U.S. Futures, Dollar Tumble as Auto Bailout Fails
By Chen Shiyin and Toshiro Hasegawa
Dec. 12 (Bloomberg) -- Asian stocks, U.S. index futures and the dollar tumbled after the Senate rejected a bailout for American automakers, threatening to deepen the global recession. Treasuries rallied and yields fell to record lows.
The MSCI Asia Pacific Index lost 3.5 percent to 84.97 as of 4:20 p.m. in Tokyo after senators voted down a bill to provide $14 billion of emergency funds for General Motors Corp. and Chrysler LLC. Honda Motor Co. and Nissan Motor Co. plunged more than 11 percent. The dollar fell to a 13-year low against the yen, while the cost of protecting Asian bonds against default advanced. Metals and crude oil prices slumped.
“Investors have been betrayed again by U.S. politicians,” said Yasuhiro Miyata, who helps manage about $109 billion at DIAM Co. in Tokyo. “Even with the knowledge that we are in the midst of a crisis, they were unable to come to an agreement and investors have decided to abandon ship. This could have a substantial effect on unemployment.”
Futures on the Standard & Poor’s 500 Index sank 4.3 percent. The measure dropped 2.9 percent yesterday, as General Motors shares plunged 10 percent, extending an 83 percent annual decline.
“It’s over with,” Majority Leader Harry Reid said on the Senate floor in Washington. “I dread looking at Wall Street tomorrow. It’s not going to be a pleasant sight.”
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