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The Nikkei 225 index plunged 6.18 percent in Tokyo Monday with much of the news concerning Japan's earthquake and tsunami focused on a damaged nuclear power plant. A second explosion was reported at the Fukushima Daiichi Nuclear Power Station. Although the blast took the roof off a building it did not directly affect any of the plant's six nuclear reactors, The New York Times reported.
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Nevertheless, fuel rods at one reactor were temporarily exposed, which leaves them vulnerable to overheating and technicians were working to pump seawater to cover the exposed rods, the Times said. In nearby hospitals, patients were being scanned to access their exposure to deadly radioactivity.
A nuclear plant 75 miles north of Tokyo was also having difficulty with cooling, Kyodo News reported.
Market futures around the world absorbed the strain, but not in as dramatic a fashion as the index in Tokyo. The Shanghai composite index in China rose 0.13 percent and the Hang Seng index in Hong Kong added 0.41 percent. The Sensex in India rose 1.46 percent.
In Australia, the S&P/ASX 200 index fell 0.4 percent. The regional DJ Asia-Pacific TSM index dropped 2.9 percent. The Global Dow was down 0.52 percent.
Markets have already been dragged through the sludge -- the sludge of rising oil prices, that is -- due to chaos in Libya and worries over debt in Europe. Late last week, Moody's investor Services downgraded Spain's debt from Aa1 to Aa2 and gave it a negative outlook. Over the weekend, however, the European Union, the International Monetary Fund and the European Central Bank allowed Greece more favorable terms on its $152 billion bailout, lowering the interest rate on the loan 1 percent and extending the terms from 3 1/2 years to 7 1/2.
Greece agreed to sell $70 billion in government assets after balking on the concept a month ago.
Ireland was not granted improved terms on its international loan because it refused to restructure is corporate tax code. Some in Europe are looking for "tax harmonization," which means asking Ireland to potentially discourage corporations from setting up shop in the Emerald Isle by raising taxes.
Ireland said no.
In midday trading in Europe, the FTSE 100 index in Britain fell 0.36 percent and the DAX 30 in Germany dropped 1.37 percent. The CAC 40 index in France lost 0.81 percent and the regional Stoxx Europe 600 gave up 0.7 percent.
In the past two weeks, U.S. markets have gone from taking small steps up and down to routinely chalking up 1 percent swings. Two years ago on March 9, U.S. markets hit their post-recession low. A two-year run-up now appears on shaky ground.
One of the great market bulls, Berkshire Hathaway, appears not to have lost its footing, announcing Monday that it would purchase petroleum-based lubricant giant Lubrizol in a deal valued at $9.7 billion.
It may prove to be a chaotic week. "All the focus is on Japan for the moment and it's easy to forget that at the same time the unrest in the Middle East and North Africa continues," said Simon Denham, at Capital Spreads, as quoted by The Wall Street Journal.
