Global sell-off

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Stock markets worldwide skidded on Tuesday:

Stock markets around the world plummeted yesterday in a wave of selling set off by a plunge in China that was reinforced by worries of weakening economies.

In China, where the stock market had been soaring, the government had warned banks about improper loans to finance stock speculation.

In America, the selling seemed to add to worries that a decline in the housing market, and problems in particular with loans to risky borrowers, could spill over. And a report yesterday indicating that orders for durable goods — items like washing machines and computers — were surprisingly weak in January revived doubts about the strength of the American economy.

Despite the tumble, the Dow is down only 4.4 percent from its record high reached last week. And the sell-off was not severe enough to set off any of the circuit breakers the New York Stock Exchange has put in place to help minimize big losses.

From The New York Times.

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