Wednesday, February 23, 2005
South Korea joins Thailand and Russia
NEW YORK (Reuters) - U.S. stocks sank on Tuesday as oil prices jumped above $51 a barrel and the dollar slid on concerns that other central banks would follow South Korea's lead in diversifying reserves out of U.S. assets.
But crude was the main focus during the session, climbing to a 15-week high amid cold winter weather in Europe and the United States, stoking fears that higher energy costs will hurt corporate profits and curb consumer spending.
The dollar also weighed on markets as the greenback suffered its biggest intraday fall against the euro since August. South Korea's central bank said on Monday it planned to diversify its reserves, the world's fourth largest, into a greater variety of currencies.
The move by South Korea fueled speculation that other central banks would follow suit. Fears of a weaker dollar diminishes foreign investors' appetite for U.S. assets.
