Global Biz

Wall Street falls after China raises reserve ratio

(Xinhua)
Updated: 2010-02-13 10:18

NEW YORK: Wall Street was off previous lows but still mired in negative territory on Friday after China's central bank decided to raise its reserve ratio requirements.

The US stocks opened sharply lower as the People's Bank of China announced on its website that it has raised the reserve requirement ratio for depository financial institutions by 0.5 percentage points, the second such action this year.

Although most analysts believe that it's the right thing for China to do to prevent the economy from overheating, it still raised worries among investors that China's economic growth might slow down.

Meanwhile, a government report showed a stronger sign of recovery in retail sector in the United States, but it provided little help to lift the market.

According to the Commerce Department, retail sales increased 0. 5 percent in January from an upwardly revised 0.1-percent decrease, better than economists' expectation. The data were originally scheduled for release on Thursday, but were delayed because of the snow storm in Washington.

The Dow Jones fell 86.38, or 0.85 percent, to 10,057.81. The Standard & Poor's 500 index lost 7.05, or 0.65 percent, to 1,071. 42 and the Nasdaq was down 4.92, or 0.23 percent, to 2,172.49.