January 15, 2008 / 8:48 PM / 12 years ago

Argentine stocks sink as investors eye U.S. economy

(Updates with trader comment, details; bond market, peso)

BUENOS AIRES, Jan 15 (Reuters) - Argentine stocks plunged on Tuesday, mirroring losses throughout the region amid investor fears of a looming U.S. recession, traders said.

The MerVal index .MERV of 42 leading companies sank 2.95 percent to end at 2,069.31 points.

When the Argentine market closed, the Dow Jones industrial average .DJI was trading 2.16 percent lower, battered by a surprise drop in December U.S. retail sales and quarterly losses at top U.S. bank Citigroup Inc (C.N).

Brazilian and Mexican stocks were also down sharply.

“The MerVal’s collapse was in line with the global situation,” said Leopoldo Olivari, trader at Bacque brokerage.

On Argentina’s broad market, volume was a moderate $41 million, while only 3 issues advanced, 63 declined and 13 were unchanged.

Sovereign bonds traded locally fell on profit-taking related to the global investor jitters, traders said.

Argentine paper shed 1 percent on average, with Par bonds denominated in pesos sinking 1.75 percent.

The peso currency ended mixed but steady. In informal trade between foreign exchange houses, as measured by Reuters, the peso firmed 0.08 percent to 3.1700/3.1725 per dollar ARSB=.

In formal interbank trade, the peso slipped 0.08 percent to 3.1400/3.1425 ARS=RASL. (Reporting by Walter Bianchi; Writing by Hilary Burke; Editing by James Dalgleish)

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