Asia Stocks Hit 2-Year Low, Europe Tumbles

Banks lead losses as US housing market woes trouble world
By Jason Farago,  Newser Staff
Posted Aug 19, 2008 5:11 AM CDT
A woman carries a parasol past the electronic stock board of a securities firm in downtown Tokyo, Tuesday, July 29, 2008.   (AP Photo/Itsuo Inouye)
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(Newser) – Asian stocks hit a two-year low today and European markets opened lower amid fears that the US will be forced to bail out Fannie Mae and Freddie Mac. In Tokyo the Nikkei tumbled 2.3%, leading declines across the region. Stocks of big European banks such as Barclays and Société Générale were sliding.

The slump signals that the worst housing crisis since the Great Depression is still far from bottoming out. The weak economic outlook also led oil to drop to below $112 a barrel. The dollar rallied once again, climbing to $1.46 per euro, but investors cautioned against seeing that as a sign of health. It "has little to do with dollar strength but more the weakness of the other currencies," warned one strategist.