Japan’s major equity index lost 6% Monday in the first day of trading since Friday’s tragic earthquake and tsunami, and saw an even steeper drop Tuesday as the Nikkei 225 slumped 10.6% on fears of a nuclear crisis set off by the disaster.
Tuesday, Japan’s prime minister announced radioactive material had leaked from the Fukushima Dai-ichi nuclear plant in Fukushima province and that more leaks were possible. People living within 19 miles (30 kilometers) of the complex were told to stay indoors. (See “Tokyo Dispatch: Japanese Fears Of Radiation Leak Mounting.”)
The sharp market decline in Japan was made its way west, with stocks in Europe and the U.K. down more than 2% at midday and U.S. indexes signaling a sharply lower open. Dow Jones industrial average futures were down over 200 points and the S&P 500 was pointing to an early decline of at least 30 points just over an hour before the open.
The nuclear power sector has been hit hardest by the Japanese disaster, with stocks on the island and in the U.S. reeling. Uranium producer Cameco was down 11.6% pre-market, after falling more than 12% Monday, while utility company Exelon was pointing toward a 3% opening drop.
Japanese automakers have suspended production at many domestic plants, sending American depositary receipts of companies like Toyota and Honda down more than 5% before the bell. The production halt may not be any boost to U.S. car companies like GM and Ford, as the industry’s supply chain could be impacted. (See “Japan’s Auto Industry Shutdown Is Bad News For U.S. Carmakers Too.”)
While the market’s focus remains on the fluid situation in Japan, U.S. economic data offered more signals of a slow recovery Tuesday. The Empire State manufacturing index, a regional gauge, came in at a reading of 17.5, better than expected, while import prices confirmed that fuel costs are rising more sharply than other prices, to the tune of 4% in February.
The Associated Press contributed to this report
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Japan’s Nuclear Crisis Roils World Markets