BBC Learning English
27 July, 2007 - Published 12:45 GMT
Stock markets slide
There have been sharp falls in share prices on stock markets in
Europe and North America. The slide was driven by worries
about the US housing market and concern that banks and investors are becoming less willing to take
risks. This report from Mark Gregory.
Stock markets across Europe and the US had their worst day in several months. In London the
main share index fell more than 200 points - the biggest one day points drop in over four years.
Everywhere the gloom was partly a response to new figures underlying the slump in the US
housing market. Poor company profits data and a jump in oil prices also played a part. But, perhaps
most important, the markets are gripped by worry that banks and investors generally are becoming
much less willing to take on risk.
For some time financial institutions have been reeling from an expected 100 billion dollars of
losses from low income Americans defaulting on loans to buy their homes. Now there's concern
about the corporate debt market - on Wednesday it emerged that banks were unable to find other
investors willing to share the risk in a high profile corporate takeover, the 12 billion dollar buyout of the US car giant Chrysler.
Other planned takeovers could also be in trouble. Analysts are warning of a "global credit crunch" meaning business could find it hard to raise money. Things aren't anywhere near as bad as that yet the fear is they may become so.
Mark Gregory, BBC
Useful Phrases:
Stock markets
associations of dealers in shares and/or goods
ready for sale or distribution, doing business
according to fixed rules
gloom
pessimistic or depressed mood
underlying the slump
being the basis of the sudden decline in trade or
business
jump
here, sharp and sudden growth
gripped by
dominated or affected by
to take on risk
to invest in businesses that aren't financially
secure now but may be later
reeling from
being seriously affected by
defaulting on loans
borrowing money but not able to pay it back
corporate takeover
when one large company or corporation takes
control of another
buy-out
the purchase of controlling shares in a company