Asia, Europe stocks sell off

By Ben Rooney, staff reporter


NEW YORK (CNNMoney) -- Asian markets fell sharply and stocks in Europe were also under pressure Thursday, following China's surprise trade deficit and another downgrade of Spain's credit rating.

In the United States, stock futures were lower as investors remain nervous about the uncertain outlook for oil prices and the ongoing political crisis in Libya.

"Investors are very risk averse," David Jones, chief market strategist at IG Markets in London, adding that trading has been "directionless" recently.

European markets fell on renewed worries that the debt problems facing Spain, Greece and other fiscally troubled members of the European Union.

Moody's cut Spain's government bond rating to Aa2 with a negative outlook from Aa1, and said further downgrades are possible.

The Spanish government has underestimated the cost of restructuring the nation's banking system, Moody's said, suggesting it could have to borrow more. In addition, the ratings agency cast doubt on the government's ability to deal with long-term fiscal problems, as economic growth in Europe is expected to remain sluggish.

The move came after Moody's slashed Greece's credit rating three notches on Tuesday, citing the country's "very large debt burden" and challenges to its fiscal reform plan.

"It's not as if anything has changed in the last week with the Greek and Spanish economies," said Jones. "But on top of the market being generally nervous because of Libya, investors are very risk averse."

Meanwhile, stocks in Asia fell more than 1% after China reported a surprise $7.3 billion trade deficit, as imports outpaced exports in February for the first time in nearly a year.

The move surprised economists, who had expected China to report a trade surplus in February, albeit a smaller one. The monthly deficit was the country's first since March 2010.

However, government officials and analysts attributed the cooling exports to Chinese New Year, when the country's manufacturing output slowed dramatically.

"We are not overly concerned by the February data, as we believe the underlying export trend remains healthy," analysts at Nomura Securities wrote in a research report.

The deficit was largely due to "seasonal factors," the report said, adding that foreign demand for Chinese goods "seems to be on a stronger footing."

"With seasonal factors gradually abating, we expect export growth to return to more normal levels in the coming months," according to Nomura.

In morning European trading, Britain's FTSE 100 edged lower 1%, the DAX in Germany fell 0.7% and France's CAC 40 declined 0.6%.

Asian markets ended the session sharply lower. The Shanghai Composite fell 1.5%, the Hang Seng in Hong Kong slid 0.8% and Japan's Nikkei tumbled 1.4%. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.06%4.28%
15 yr fixed3.17%3.24%
5/1 ARM3.52%3.41%
30 yr refi4.04%4.19%
15 yr refi3.15%3.18%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,079.57 -42.44 -0.25%
Nasdaq 4,557.70 -11.93 -0.26%
S&P 500 1,996.74 -3.38 -0.17%
Treasuries 2.33 -0.03 -1.14%
Data as of 4:41am ET
Company Price Change % Change
Apple Inc 102.25 0.12 0.12%
Bank of America Corp... 16.01 -0.19 -1.17%
Facebook Inc 73.86 -0.78 -1.04%
Pfizer Inc 29.38 -0.11 -0.37%
Intel Corp 34.65 -0.14 -0.40%
Data as of Aug 28

Sections

The CEO of American International Group, Robert Benmosche, says he is leaving the company earlier than expected because of a terminal cancer diagnosis. More

Prime Minister Shinzo Abe has been trying to reshape Japan's economy. Can he end deflation and deliver a revival? More

Whether you've got wanderlust or an airline grievance, here are some apps to pack onto your phone. More

Whether you've got wanderlust or an airline grievance, here are some apps to pack onto your phone. More

Five CNNMoney readers share stories about saving that you can learn from: What they would do differently if they had another chance. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.