US stocks turned lower in trading today as optimism spurred by surprisingly upbeat economic data faded and investors fretted over where the next accounting scandal might erupt after the WorldCom bombshell.
Trading in shares of General Motors was halted for an imbalance as rumours swirled around the auto giant, traders said.
The Dow Jones industrial average fell 50.4 points, or 0.55 per cent, at 9,069.71, and the broader Standard & Poor's 500 Index fell 5.77 points, or 0.59 per cent, to 967.76. The technology-laced Nasdaq Composite Index was down 6.99 points, or 0.49 per cent, at 1,422.34.
US gross domestic product (GDP) grew at a revised 6.1 per cent seasonally adjusted annual rate during the first three months of this year, up from an earlier estimate of 5.6 per cent, the Commerce Department said in its final reading for the quarter.
This was the fastest rate in more than two years.
Nevertheless lingering questions about Corporate America's trustworthiness in the wake of a slew of accounting scandals was said to be unnerving investors.
US stocks staged a dramatic rebound late yesterday when investors snapped up beaten-down shares after global markets were rocked by US phone company WorldCom’s disclosure of nearly $4 billion in improperly booked expenses.
WorldCom's disclosure sent the market into a tailspin yesterday as it shook investors' trust in Corporate America. But investors stepped in to buy beaten-down shares and the battered Nasdaq market ended with a slim gain.
Stock markets in Europe and the Far East recovered somewhat today after yesterday’s heavy losses. Investors were said to be encouraged by Wall Street's calm reaction to WorldCom.
However the Irish Stock Exchange remained jittery on opening after yesterday saw €1.4 billion wiped off the value of the market. The ISEQ index of shares was down 21.92 at 4,675.40 this afternoon. The FTSE100 Index is up 9.60 at 4,540.60 near close of trading.
In Germany the DAX was up 66.86 points or 1.63 per cent at 4,165.91 this afternoon while in France the CAC-40 was up 41.65 at 3,742.78.
Similarly share prices in Toyko closed sharply higher, partially rebounding from the previous day's dramatic losses.
However, they added that sentiment towards global equity markets remains negative, given worries over the possibility of more corporate scandals in the US and still high valuation levels.
The Nikkei 225 index closed up 187.04 points, or 1.86 per cent, at 10,261.60, off a high of 10,335.97 and a low of 10,176.18.
Additional reporting: