Global stocks at 2-year low

Tom Miles
Reuters
Friday, Sept 5, 2008

Investors dumped euros and shares on Friday as U.S. economic troubles made bets on growth elsewhere look too risky, sending stocks to their lowest in two years while triggering a surge in safe-haven government bonds.

The ratcheting up of fear followed a 3 percent sell-off on Wall Street on Thursday, the steepest decline for more than two months, prompted by an unexpected jump in jobless claims and nervousness ahead of monthly jobs data on Friday.

The renewed worries sent the yen soaring as investors unwound carry trades, ditching bets in which they had borrowed the Japanese currency to buy euros or high-yielding Australian or New Zealand dollars.

"This is not a flight to quality, it is simply a flight," said Alan Ruskin, chief international strategist at RBS Greenwich Capital.

"Gold for example has failed to benefit, cash is king -- even the greenback, warts and all, or the yen, zero rates and all."

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