Investors flee risk as double-dip looms

The warning signs on both sides of the Atlantic point to just one thing. A double-dip is looming and investors are getting increasingly risk-adverse.

Investors continued to retreat from risk this week. After last week's sharp slide the S&P 500 and FTSE 100 lost 5% and 4% respectively. Both indices are now close to nine-month lows. Meanwhile, the dollar has bounced off a six-week low against the euro as investors seek a safe haven.

Yet more poor data on both sides of the Atlantic is fuelling fears of a double-dip recession. Indices tracking activity in the services sector in Britain and America retreated to an 11- and four-month low respectively and American job figures disappointed again. Investors have also been fretting that Europe's bank stress tests, due to be published later this month, are not rigorous enough.

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