Concerns that China would soon initiate steps to cool economic growth sent stocks sharply lower on Friday. Prices for raw materials and commodities dropped on concerns a slowdown in Chinese growth would impact demand. Eurozone growth concerns also weighed on sentiments.
The Dow average fell more than 90 points, or 0.8%, to 11192.58, with shares in energy and material companies leading the drop. The average fell 2.2% during the week, its first weekly drop in five weeks. The broader S&P’s 500-stock index fell 14.43 points, or 1.2%, to 1199.21. The tech-focused Nasdaq Composite index shed a little more than 37 points, or 1.5%, to 2518.21. On the New York Stock Exchange, declining issues beat those that rose in price by a five-to-one margin.
A Chinese government report that said rate of inflation jumped to a two-year high in October fueled worries that Beijing would tighten monetary policy to control the breakneck surge in the domestic economy.
Losses on the Dow were led by Boeing (NYSE:BA), which fell 3.5%, to $63.09, after Sanford C. Bernstein cut its rating on the stock to “market perform,” saying the company’s 787 Dreamliner project could face further delays. Meanwhile, the CBOE Vix, the measure of market’s volatility, surged 10.6%, to 20.61.
The demand Treasury notes was weak, with the price of the benchmark 10-year note falling and it yield rising to 2.78% from 2.65% late Thursday. It was the 10-years’ largest increase since August. Gold prices retreated, dropping 2.7% to end the week at $1365.50. Growth concerns sent crude prices off 3.3% to $84.88.
Among the S&P’s ten industry sectors, only oil and gas shares could manage gains, closing up 1.2%. Those leading on the downside were financials, off 3.9%, technology shares, off 3.1%, industrials, down 2.8%, utilities down 2.4%, telecommunications off 2.0%, basic materials down 1.9%, consumer service off 1.6%, health care down 1.5%, and consumer goods closing off 1.3%.
Last week Macy’s (NYSE:M) and JC Penney (NYSE:JCP) kicked off retailers’ earnings season with better-than-expected results. More of the same is hoped for when such retailers as Abercrombie & Fitch (NYSE:ANF), Home Depot (NYSE:HD), and Lowe’s (NYSE:LOW) announce earnings. Wal-Mart (NYSE:WMT) numbers are also due.
ABERCROMBIE (ANF): Free Stock Analysis Report
BOEING CO (BA): Free Stock Analysis Report
HOME DEPOT (HD): Free Stock Analysis Report
PENNEY (JC) INC (JCP): Free Stock Analysis Report
LOWES COS (LOW): Free Stock Analysis Report
MACYS INC (M): Free Stock Analysis Report
WAL-MART STORES (WMT): Free Stock Analysis Report
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