By Nick Godt and Simon Kennedy, MarketWatch
MUMBAI (MarketWatch) — U.S. stock futures fell sharply on Tuesday after Japan’s Nikkei Average tumbled nearly 11% amid reports that radiation was leaking from a nuclear plant hit by Friday’s earthquake and tsunami.
Futures for the Dow Jones Industrial Average (DJM11 11,628, -298.00, -2.50%) were down 161 points, or 1.4%, at 11,765.00 and futures on the Standard and Poor’s 500 index (SPM11 1,257, -33.30, -2.58%) fell 20 points, or 1.6%, to 1,270.40.
Nasdaq 100 future (NDM11 2,228, -61.75, -2.70%) were down 32.75 points, or 1.4%, at 2,256.75.
Dow futures earlier fell as low as 11,611 following two more explosions Tuesday at the Fukushima Daiichi nuclear-power plant, at the No. 4 and No.2 reactors, with the latter leading to a sharp rise in radiation levels.Read more on Japan’s nuclear crisis.
Futures recovered slightly from their lows as Japanese media reported that the fire at reactor No. 4 had been put out, citing Tokyo Electric Power Co. (JP:9501 1,221, -400.00, -24.68%) .
The Nikkei Stock Average (JP:NI225 8,605, -1,015, -10.55%) plunged more than 14% at one point in afternoon trade before recovering slightly to end down 10.6% — its worst drop since 2008. The fall came on top of Monday’s 6.2% tumble. Read more on the Nikkei’s slide.
In other Asian markets, Hong Kong’s Hang Seng index (HK:HANGSENG 22,678, -667.63, -2.86%) closed down 2.6% and South Korea’s Kospi (XX:$SEU 1,924, -47.31, -2.40%) fell 2.4%
European stock markets also dropped sharply in early trading, with the Stoxx Europe 600 index (ST:STOXX600 263.40, -9.11, -3.34%) falling 1.6% and Germany’s DAX 30 index (DX:DAX 6,548, -318.36, -4.64%) dropping 2.2%.
Nymex crude-oil futures also fell over 1% in electronic trading. Light crude for April delivery was down $1.30 at $99.89 a barrel on Globex. Read more on oil.
The dollar fell against the yen, with analysts citing support for the Japanese currency from domestic retail and institutional investors reducing their risk exposure. Read more about the yen.
U.S. markets also await a monetary-policy meeting by the Federal Reserve on Tuesday.
“With the recovery in the U.S. economy still very vulnerable to external shocks such as the spike in oil prices and the earthquake in Japan, the Federal Reserve will most likely err on the sound caution by providing minimal clues on where they stand on monetary policy,” said Kathy Lien, director of currency research at GFTForex, in a note.
