Financial reverberations from Japan's record earthquake and nuclear plant woes continued Tuesday with markets falling worldwide, capping an 18 percent decline on the Tokyo stock exchange.
Stock markets around the world have swooned since the March 11 quake that killed at least 2,700 people in Japan with at least another 3,700 missing, according to government reports. Radiation leaks from nuclear plants in the northern part of the country have prompted evacuations of more than 140,000 people.
Japan's stock market decline was the biggest since the financial crisis of 1987. In the U.S., stocks opened sharply lower again Tuesday after dropping about 6 percent Monday. The Dow Jones Industrial Average fell 272 points in early trading, a 2.3 percent decline. Oil and gas prices have eased with news of the quake on concern that the disruption may slow economic growth. The futures market, which can indicate how stocks will perform, looked so ugly before trading began that the New York Stock Exchange invoked a special rule to smooth volatility, according to the Associated Press. The Dow recovered somewhat later in the day but still closed down 138 points, or more than 1 percent.
Fear had taken hold in the market as traders worried about the nuclear crisis and a possible slowdown in Japan's economy, the world's third-largest, Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners, told the Associated Press.
"It's a situation where you sell, and you ask questions later," he said.
Yesterday, the Department of Energy reported said that the retail price of gas has risen to an average $3.567 a gallon nationwide, up 4.7 percent from a week ago. The biggest increases were in California (8 percent) and the West Coast generally (7.4 percent).
Consumers, however, may also now have to contend with a reduction in the number of fuel-efficient cars imported from Japan.
Japan's manufacturing sector was hit hard by the quake and is still reeling. U.S. imports of everything from cars to consumer electronics to semiconductors eventually may be affected.
The biggest U.S. imports from Japan include passenger cars ($41.4 billion), automotive accessories ($8.8 billion), computer accessories ($6.7 billion) and semiconductors ($3.5 billion).
For the moment, the big Japanese car makers have plenty of inventory sitting on U.S. wharves, awaiting delivery to showrooms.
Honda spokesman Marcos Frommer says that U.S. consumers haven't been affected. "There's been no impact. We make 80 percent of the Hondas sold in the U.S. right here in North America. We anticipate consumers will continue to see plenty of cars at the dealership." He adds, however, that Honda is continuing to evaluate the longer-term situation.
The 20 percent of cars imported includes the Honda FIT, the Insight hybrid and the Civic hybrid. In Japan, he says, "All production is suspended currently—both finished vehicles and parts."
Javier Moreno, a spokesperson for Toyota says, "At this point, we have enough supply in the pipeline that the impact to North America will be minimal." About 65 percent of Toyotas are built in the U.S., the rest imported from Japan. Production in Japan, he says, will be suspended for at least three days--March 14, 15 and 16. "That's 40,000 units that will be affected, not all of which would have gone to North America." Toyota hasn't yet decided when it will resume production.