Lowered expectations for the global economy are giving investors more to be wary about.
The major stock indexes retreated more than 1 percent in early trading Monday after the World Bank added to the market’s growing economic worries. The Washington-based global lender predicted the world economy will shrink 2.9 percent in 2009. That estimate was worse than its previous forecast for a 1.7 percent decline.
The stock market is coming off its first weekly loss in more than a month after mixed economic readings last week deflated hopes for a quick U.S. recovery. No major economic reports are due Monday, but later in the week traders will get data on new and existing home sales, durable goods orders, gross domestic product and personal incomes and spending.
The Federal Reserve will also be in the spotlight after its two-day meeting on monetary policy that ends Wednesday. The central bank is expected to hold its key fed funds rate steady near zero, but investors want to know whether policy makers will buy more Treasurys than they initially planned to help keep interest rates down.
The Fed has been buying government debt at the same time the Treasury Department has been issuing record amounts of government debt. The Treasury is planning to auction $104 billion in debt this week.
In the first hour of trading, the Dow Jones industrial average fell 105.50, or 1.2 percent, to 8,434.23. The Standard & Poor’s 500 index fell 14.30, or 1.6 percent, to 906.93, and the Nasdaq composite index fell 29.80, or 1.6 percent, to 1,797.67.
Copyright 2009 The Associated Press.
