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Dow Jones slumped because of Portugal

NEW YORK, KOMPAS.com - In the early period of trading, Wednesday (05/05/2010), the index of the Dow Jones Industrial Average slumped 0.5 percent. Blue chip index declining 100 points, the S & P 500 index lost 8 points, or 0.6 percent, and the Nasdaq composite fell 23 points or 1 percent.

This is due to investor fears of an international rating agency Moody `s are expected to reduce the financial ratings of Portugal. When the ratings of Portugal is lowered, then the market participants expect the crisis in Europe will increasingly widen.

Rating agency Moody's in its release, Wednesday, stating it was reviewing the possibility to lower the ratings of Portugal.

Tuesday yesterday, the money market is also shaken by rumors that Spain was negotiating a bailout by the International Monetary Fund (IMF). This occurs even though rumors have been denied by the Government of Spain and IMF officials.

However, according to Philip Isherwood of Evolution Securities in London, the situation in Spain is still unclear. Many investors are also worried that Spain as a country with the fourth largest economy in Spain may fall headlong to follow the Greek.