NEW YORK (AP) -- The steel sector tumbled Wednesday following alarming economic signals from Europe and new efforts from China to kick-start its economy.
Economic confidence across Europe fell sharply in this month according to the latest indicator published by the European Union's executive branch.
The European Commission's economic sentiment indicator for the 17 countries that use the euro fell by 2.3 points in May to 90.6 — its lowest level in about two and a half years.
That was worse than expected, and led to a broad market sell-off of stocks across Europe and in the United States.
However, U.S. companies that have a major international presence were hit hardest, including steel manufacturers.
There are fears that Europe's problems will slow global demand for steel, said Argus Research analyst Bill Selesky.
And with the euro plunging against the dollar, it will make U.S.-made steel even more expensive overseas.
By early afternoon, shares of United States Steel Corp. fell 98 cents, or 4.4 percent, to $21.48; AK Steel Holding Corp. dropped 25.5 cents, or 3.9 percent, to $6.29; Nucor Corp. declined 66 cents to $35.95; and ArcelorMittal was down 67 cents, or 4.5 percent, to $14.26.
There is growing discomfort over stability in Spain, where the country's borrowing costs on Wednesday reached the highest level since the country joined the euro.
However, the news was not much better out of China, among the few major economies to show resilience during the global economic downturn.
The country is launching a stimulus program to boost growth with a steady drumbeat of economic data that suggest the nation's white hot economy is slowing.
China's National Development and Reform Commission approved three major new steel projects, including a 64 billion yuan ($10 billion) investment by Baosteel Group, China's biggest steel producer.
That could put more steel into the global marketplace at a time when there is ample inventory, Selesky said.
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AP Business Writer Joe McDonald contributed to this report.
