Stocks tumble on global economic worries

By STEPHEN BERNARD AP Business Writer

NEW YORK (AP) - Stock and interest rates are tumbling with fresh signs of a global economic slowdown spooking investors.

Some of those cues from overseas exchanges. Major Asian and European markets are all down sharply.

Interest rates are down in the bond market as investors seek the safety of Treasurys.

Investors fear that the nascent global rebound is weakening and consumers are still hiding.

A report due out later Tuesday is expected to show consumer confidence is down this month.

The Dow Jones industrial average is down 99.68, or 1 percent, at 10,038.84. The Standard & Poor's 500 index is down 11.07, or 1 percent, at 1,063.50, while the Nasdaq composite index is down 36.26, or 1.6 percent, at 2,184.39.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

NEW YORK (AP) - Stock futures and interest rates tumbled Tuesday after fresh signs of a global economic slowdown spooked investors.

U.S. investors were taking some of their cues from overseas exchanges. Asian markets fell overnight when Japanese data showed that its country's recovery has slowed. European indexes fell sharply after Greek workers again walked out of their jobs to protest steep budget cuts.

Interest rates fell in the bond market as investors sought the safety of Treasurys and drove prices higher. The yield on the 10-year note dropped to as low as 2.97 percent, the first time it has fallen below 3 percent since April 2009. The yield, which is used as a benchmark for many consumer loans and mortgages, bounced off its low and edged up to 2.99 percent.

Falling yields are a sign that investors are willing to forgo potential big gains in stocks for more certain, but smaller profits in bonds.

Investors are worried that the global rebound is weakening. Consumers appear to have similar fears. A report due out Tuesday on consumer confidence is expected to show confidence fell in June after three straight months of gains.

Economists polled by Thomson Reuters forecast the Conference Board's consumer confidence index fell to 62.8 from 63.3 last month. The index needs to climb above 90 to indicate the economy is on solid footing. It is set to be released at 10 a.m. EDT.

Consumer confidence could be waning, in part, because there have been few signs that job growth will pick up. The Labor Department's monthly employment report due out Friday is expected to show the unemployment rate rose 0.1 percent to 9.8 percent in June.

Ahead of the opening bell, Dow Jones industrial average futures fell 116, or 1.2 percent, to 9,972. Standard & Poor's 500 index futures fell 14.80, or 1.4 percent, to 1,056.10, while Nasdaq 100 index futures dropped 26.00, or 1.4 percent, to 1,810.00.

A report that showed home prices rose in April did little to affect trading. The S&P/Case-Shiller home price index 20-city home price index rose 0.8 percent between March and April. The gains, though, are likely being written off because April was the final month when buyers could receive a tax credit. Nearly all housing indicators got a boost in April from the credit, but have since shown a slowdown in the market.

Meanwhile, worries about Europe are again rattling the market. The euro, the common currency used by 16 European nations, fell to $1.2202. The currency has been seen as a proxy for confidence in Europe's economy following Greece's near bankruptcy and steep budget cuts around the continent to combat rising deficits. World markets have regularly dropped along with the euro in recent months.

Greek workers walked off their jobs as part of another nationwide strike to protest the austerity measures the government put in place to try and reduce debt. The austerity measures were a requirement for Greece to receive a bailout from other European Union members and the International Monetary Fund.

The new round of protests sparks fresh concerns about how well European countries will be able to stick to austerity plans in the face of public outcry against them. Investors have been worried for months that Europe's economy would falter and hurt the recoveries in other countries including the U.S.

The Japanese government reported Tuesday that export demand moderated and household spending dropped last month. Unemployment also rose unexpectedly, climbing for the third straight month.

Chinese shares tumbled as investors worried that an initial public offering for the Agricultural Bank of China would draw money away from other stocks. The Shanghai composite index fell 4.3 percent to a 14-month low, while Japan's Nikkei stock average fell 1.3 percent.

Britain's FTSE 100 fell 2.1 percent, Germany's DAX index dropped 2.3 percent, and France's CAC-40 fell 3 percent.