NEW YORK – Investors' rising fears about consumer spending are turning stocks into a risky investment again.
Stocks fell by the sharpest amount in six weeks and Treasury prices soared Monday as investors around the world feared that consumers are too anxious to spend the economy into recovery. The losses on stock exchanges extended the heavy selling that began Friday with a disappointing reading on consumer confidence. And bond investors, once again searching for a safe investment, bought heavily into Treasurys.
The Dow Jones industrials fell 170 points, while overseas, the Shanghai stock market tumbled almost 6 percent and the major indexes in Europe fell more than 1.5 percent.
Stocks fell across all industries as investors worried that consumers' reluctance to spend will hurt corporate earnings. Many companies second-quarter results were boosted by cost-cutting, not higher sales, and the fear is that without a pickup in sales, earnings will fall.
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