Latin American stocks fall, track world downturn

Latin American stocks fell sharply Tuesday, tracking U.S. and world markets on concerns about a continued slumping economy.

Mexico's IPC index dropped 5.8 percent to 19,213, and the peso slipped to 14.04 to the U.S. dollar. The currency has weakened 40 percent since early August.

Mexico has been especially vulnerable to falling consumption in the recession-wracked U.S., which buys 80 percent of its exports.

Patricio Rivera, an analyst with Mexico's IXE Grupo Financiero, said worries about the U.S. economy led major stock markets to tumble around the world. Meanwhile, he said, investors looking for President Barack Obama to announce economic revival measures in his inaugural speech were left waiting.

"The takeover of the U.S. presidency by Obama was not enough to counteract that generalized pessimism," Rivera said.

Argentina's Merval index dropped 5.8 percent to 1,405, while Chile's IPSA lost 0.8 percent to 2,481.

Brazil's benchmark Ibovespa index dropped 4 percent to 37,272. The nation's currency, the real, fell against the dollar.

It was the second down day in a row for the Ibovespa, which weakened 1.3 percent Monday after the government reported December job losses hit 654,000.

Many Brazilian companies are exporters, and worldwide demand for their products has dropped dramatically.

The world economic crisis has pummeled Latin American stocks, slashing demand for oil, iron ore, copper and other commodity exports on which many of the region's biggest companies depend. Latin American currencies have also been hammered as foreign investors dump local assets to cover losses at home.