Dow Futures Drop 63 Points After IMF Warning

Oct 18, 2011, 11:13 by R.E. Christian

U.S. markets turned lower Tuesday as the International Monetary Fund warned austerity programs could cut into global demand.

In a report issued Monday, the IMF said concerning cuts in government spending that, "The immediate risk is that the global economy tips into a downward spiral. ... Even in a less severe scenario, key advanced economies could suffer from a protracted period of low growth."

In addition, the U.S. producer price index released Tuesday said prices paid by manufacturers rose 0.8 percent in September, an inflation pace that is higher than the target set by the U.S. Federal Reserve.

In midmorning trading on Wall Street, the Dow Jones industrial average lost 63.19 points, 0.55 percent, to 11,333.81. The Standard & Poor's 500 index shed 3.94 points, 0.33 percent, to 1,196.92. The Nasdaq composite index gave up 17.24 points, 0.66 percent, to 2,597.68.

The benchmark 10-year treasury note rose 12/32 to yield 2.114 percent.

The euro fell to $1.3678 from Monday's $1.3737. Against the yen, the dollar fell to 76.73 yen from Monday's 76.83 yen.

In Tokyo, the Nikkei 225 index lost 1.55 percent, 137.67 points, to 8,741.91.

Source: UPI