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Riots, marches shatter calm European market

By Elena Becatoros

Associated Press

Published: Wednesday, Sept. 26 2012 9:44 p.m. MDT

A Greek orthodox priest walks next a docked ship during a strike at Piraeus, the port of Athens, on Wednesday, Sept. 26 2012. A nationwide general strike in debt-crippled Greece against planned new austerity measures shut down schools, banks and government offices, and stopped ferry and train services for 24 hours. Labor unions were planning protest marches in central Athens later Wednesday. (AP Photo/Petros Giannakouris)

Associated Press

ATHENS, Greece — Europe's fragile financial calm was shattered Wednesday as investors worried that violent anti-austerity protests in Greece and Spain's debt troubles showed that the continent still cannot contain its financial crisis.

Police fired tear gas Wednesday at rioters hurling gasoline bombs and chunks of marble during Greece's largest anti-austerity demonstration in six months. The protests were part of a 24-hour general strike, the latest test for Greece's nearly 4-month-old coalition government and the new spending cuts it plans to push through.

The brief but intense clashes by several hundred rioters among the 60,000 people protesting in Athens came a day after anti-austerity protests rocked the Spanish capital.

In Madrid, thousands of angry protesters again swarmed as close as they could get Wednesday night to Parliament, watched by a heavy contingent of riot police. There was no fresh violence, but the demonstrators cut off traffic on one of the city's major thoroughfares at the height of the evening commute.

The protesters chanted for the release of 34 people detained Tuesday night in clashes that injured 64 others. They also demanded new elections to oust Prime Minister Mariano Rajoy and his conservative government, which has imposed cutbacks and tax hikes, deepening the gloom in a country struggling with recession and unemployment of nearly 25 percent, the highest among the 17 nations using the common euro currency.

Spain's central bank warned Wednesday the country's economy continues to shrink "significantly," sending the Spanish stock index tumbling and its borrowing costs rising.

Across Europe, stock markets fell as well. Germany's DAX dropped 2 percent while the CAC-40 in France fell 2.4 percent and Britain's FTSE 100 slid 1.4 percent. The euro was also hit, down a further 0.3 percent at $1.2840.

The unrest in Europe also pulled down U.S. stocks.

The Dow Jones industrial average finished the day down 44 points at 13,414. The Standard & Poor's 500 index fell eight to 1,433. The Nasdaq composite index dropped 24 to 3,094.

The turmoil Wednesday ended weeks of relative calm and optimism among investors that Europe and the eurozone might have turned a corner. Markets had been breathing easier since the European Central Bank said earlier this month it would buy unlimited amounts of government bonds to help countries with their debts.

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