October 17, 2008	Friday	Shawwal 17, 1429

NEW YORK, Oct 16: Economic data pointing to a US recession shook markets on Thursday, reviving an aversion to risk and sending global stocks lower.

European speculative-grade credit spreads revisited record-wide levels and eurozone government bond prices pushed higher as intensifying fears of world recession boosted demand for safe-haven assets.

US industrial production posted the biggest monthly decline since 1974 and the Philadelphia Federal Reserve Bank reported its survey of Mid-Atlantic factory activity in October plummeted to its lowest in 18 years.

Alan Ruskin, chief international strategist at RBS Global Banking in Greenwich, Connecticut, said the Philly Fed data confirmed that the meltdown in financial markets is being closely followed by a dramatic slide in the economy.

“We have seen weaker Philly Fed data but only fleetingly at the depths of recessions. Ugly data, more risk aversion,” Ruskin said.

US share prices gyrated, opening higher and then falling when the Philly Fed data came out. They rallied briefly as investors snapped up beaten-down shares while a report saying Microsoft may pursue a search partnership deal with Yahoo pulled the Nasdaq higher, then slipped after Microsoft said it had no interest in actually buying Yahoo.

At 1.30pm, the Dow Jones industrial average was down 66.66 points, or 0.78 per cent, at 8,511.25. The Standard & Poor’s 500 Index was down 8.72 points, or 0.96 per cent, at 899.12. The Nasdaq Composite Index was up 2.31 points, or 0.14 per cent, at 1,630.64.—Reuters