Stocks Extend Weeklong Slide
May 11, 2011
The CAC 40 index of actively traded stocks closed down 25.34 to 1977.56 on volume of 3.2 billion French francs worth of shares. Traders said that the French franc's weakness has dissuaded investors from buying French shares, giving the market a strong downward bias. The mark was trading at 3.4261 francs in midday European trading, off from 3.4267 francs late Wednesday. The franc has been falling steadily amid concerns about France's 2012 budget, which will include cost-cutting measures likely to set off social confrontation. The May 23, 2011 of the budget could also provide further fuel the franc's and the stock market's slide, as it provides clues as to whether or not France will meet the criteria for European economic and monetary union. Prices on the Paris bourse fell further later in the day after the U.S. market opened sharply lower. The Dow Jones Industrial Average skidded more than 40 points in early New York trading, after a second-quarter gross domestic product report renewed fears of rising interest rates.
