World Stocks Plumment on Fed Worries

HONG KONG (AP) -- World stock indexes tumbled Monday, as investors reacted to comments last week from a Fed official, who caught markets off guard by saying that interest rates could rise soon. Questions about presidential candidate Hillary Clinton's health also cast a shadow after she was diagnosed with pneumonia during the weekend.

KEEPING SCORE: European stocks sank in early trading. France's CAC 40 skidded 2.3 percent lower to 4,390.88 and Germany's DAX fell 2.1 percent to 10,347.91. Britain's FTSE 100 shed 1.7 percent to 6,663.49. U.S. stocks were poised to open lower, with Dow futures down 0.6 percent to 17,859.00 and broader S&P 500 futures also losing 0.6 percent to 2,103.60.

FED FOCUS: The regional decline followed losses on Wall Street, which had its worst day in two months on Friday after investors seized on remarks by Fed Bank of Boston President Eric Rosengren. He said there's a case to be made for the U.S. central bank to raise its key interest rate sooner rather than later, surprising Fed observers, who are now starting to think policymakers might act as soon as their next meeting, set for Sept. 20-21, instead of waiting until December as many had expected. The Fed last raised rates at the end of 2015, which was the first increase in seven years. Keeping them at ultra-low levels has helped fuel an extended stock market rally.

THE QUOTE: "The issue here for a lot of people is the fact they haven't seen interest rates go up (in a long time) and they just don't know what's going to happen," said Andrew Sullivan, a sales trader at Haitong Securities. With so much uncertainty over when the Fed will actually take action to raise rates, "I think there are a lot more investors that are going to go to cash and just wait and see what happens," he added.

US VOTE: Clinton's abrupt departure from a 9/11 anniversary ceremony on Sunday, and her illness less than two months before election day, added an extra element of uncertainty to already fragile global sentiment. In a statement, Clinton's doctor said the former secretary of state had become overheated and dehydrated at the event in lower Manhattan.

GALAXY RECALL: Shares of Samsung Electronics tanked 7 percent to their lowest level in almost a month, after the company urged consumers globally to stop using its Galaxy Note 7 phone. The South Korean electronics giant is grappling with the fallout from an unprecedented recall of 2.5 million of its newest smartphones after several dozen of them caught fire. Over the weekend, the company urged users to return them for a replacement and a number of airlines said they would be banned.

ASIA'S DAY: Japan's benchmark Nikkei 225 index lost 1.7 percent to 16,672.92 and South Korea's Kospi slid 2.3 percent to 1,991.48. Hong Kong's Hang Seng shed 3.4 percent to 23,290.60 and the Shanghai Composite Index fell 1.8 percent to 3,021.98. Australia's S&P/ASX 200 sank 2.2 percent to 5,219.60, while the Sensex in India dropped 1.4 percent to 28,381.64. Benchmarks in Taiwan, Thailand and New Zealand also fell.

ENERGY: Oil futures extended losses. U.S. benchmark crude fell 71 cents to $45.17 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.74, or 3.7 percent, to close at $45.88 a barrel on Friday. Brent crude, used to price international oils, slid 74 cents to $47.27 a barrel.

CURRENCIES: The dollar slipped to 102.12 yen from 102.69 in late trading Friday. The euro climbed to $1.1242 from $1.1232.

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