NEW YORK: Wall Street shares tumbled Wednesday with investors turning cautious as auto giant General Motors moved towards bankruptcy and the market was gripped by fears about rising US debt.
The blue-chip Dow Jones Industrial Average fell 173.47 points (2.05 per cent) to end at 8,300.02, giving back nearly all of Tuesday’s gains. The tech-rich Nasdaq shed 19.35 points (1.11 per cent) to 1,731.08 and the broad-market Standard & Poor’s 500 index fell 17.27 point (1.90 per cent) to close at 893.06.
Traders said investors entered the market Wednesday cautious after General Motors reported that it had failed to win sufficient support from bondholders for a deal to swap debt for equity, making a bankruptcy filing more likely.
Fears also re-emerged about ballooning US government debt and its impact on borrowing costs amid a prolonged recession, pushing yields for US Treasury bonds higher. The cautious market “makes sense as traders are waiting to see if the market’s wheels start turning and there is a bid to back up Tuesday’s gains with more conviction,” said Briefing.com’s Patrick O’Hare. -- AFP