Stock Market Domino Effect

7:00am EST

Markets in Asia and Europe fell again Monday, extending their slide into a second week as investors worried about a possible global "domino effect."

"When there's such a big market move in such a short period of time, there's that element of surprise and confusion," said Teruhisa Ishikawa, section chief for investors information at Mizuho Investors Securities Co.

"Everything takes a back seat relative to the sell-off that we are seeing," said Jose Vistan, research director at AB Capital Securities in Manila, Philippines, where the benchmark index sank 4.5 percent. "I don't know where the domino effect will stop."

Analysis

Possible motivations: Yen's jump to a three-month high against the dollar as investors reversed so-called yen-carry trades. In the US, markets were concerns about mortgage defaults and foreign markets.

Update:

The Dow Jones Index finished 63 points lower, having fallen in eight of the last nine sessions for a total loss of 4.6% in value since the market deflation started last Tuesday.

The Nasdaq composite index -- which is dominated by riskier technology and smallcap stocks -- dropped 27.32, or 1.15 percent. The Nasdaq has lost about 7% of its value since the slide began last Tuesday.

HSBC Holdings PLC, Europe's largest bank, said it suffered $10.6 billion in losses in 2006 on bad loans from its U.S. subprime mortgage operations. More on Real Estate.

Sources:

Extensive quotes from Associated Press, AP, March 5, 2007, "Markets across Asia plunge," YURI KAGEYAMA.

Associated Press, AP, March 5, 2007, Madlen Read,
Dow Ends Down 64, Nasdaq Drops 27 After Erratic Session Amid Worries About Mortgage Defaults