Stocks plunged Tuesday amid mounting concern China may step up measures to curb inflation and fears that Ireland will need to tap international bailout funds.
The Dow Jones industrial average was down about 200 points, or 1.8%, at 11,001 in early afternoon trading, while the S&P 500 was down about 21, or 1.8%, at 1,176.
Futures maintained losses after government data showed wholesale costs in the U.S. rose less than forecast in October, underscoring the rationale behind the Federal Reserve's decision this month to purchase another $600 billion in assets to help spur growth, a tactic known as quantitative easing.
Chinese Central Bank Gov. Zhou Xiaochuan on Tuesday said China is under “pressure” from capital inflows as a state newspaper said price controls could be imposed to cool the fastest inflation in two years.
The People's Bank of China last month raised its benchmark one-year lending rate by a quarter of a percentage point to 5.56%, the first increase since 2007. Chinese consumer prices jumped 4.4% in October, the fastest pace in two years.
Ireland is in talks with European and International Monetary Fund officials about a bailout that would shore up the state's finances as well as enable it to inject capital into the country's banks, said a European official with direct knowledge of the talks. The two-part funding package would mean Ireland wouldn't have to tap the bond market for an extended period as it tries to cut its budget deficit, said the person, who spoke on condition of anonymity.
