Market Wrap-Up
Stocks and many exchange-traded funds took a pounding in their worst week since March 2009, as European market woes weighed on U.S. indexes. Friday’s strong jobs report was overshadowed by concerns about European debt that affected markets across the Atlantic.
The Dow Jones Industrial Average shed 140 points to close at 10380. The S&P 500 fell 17 points to finish at 1111, and the Nasdaq dropped 54 to 2266. The Dow lost 5.7% for the week, while the S&P shed 6.4% and the Nasdaq dropped 8.0%. It was the biggest weekly slide for the Dow and S&P since March 2009, and the worst for the Nasdaq since November 2008.
Friday’s losses followed one of the most tumultuous stock sessions in history. U.S. stocks ended with steep losses Thursday after an afternoon meltdown lopped nearly 1,000 points off the Dow — its biggest intraday drop on a point basis ever — before a comeback, as Europe’s troubles took hold on Wall Street and talk of errant trades exacerbated the swift selloff. The Dow finished the day down 347 points, or 3.2%.
The market turmoil obscured some encouraging economic data. In its closely-watched employment report, the Labor Department said Friday that nonfarm payrolls rose by a higher than expected 290,000 last month, the largest gain since March 2006. That followed an upwardly revised 230,000 increase in March. Economists polled by Dow Jones Newswires were expecting payrolls to rise by 180,000. The March figure was originally reported as a 162,000 increase.
Taking into account revisions to prior months, the U.S. economy added an average of 143,000 jobs a month in the first four months of the year. However, the unemployment rate increased to 9.9% last month. Economists were expecting it to remain at March’s 9.7% level.
European markets slid again as Greece’s debt woes dominated trading decision. The Stoxx Europe 600 index of European equities finished the week with an 8.7% drop, according to preliminary closing data. That’s the worst weekly performance since the 11.5% drop in the week ended Nov. 21, 2008.
Whether the euro zone can contain Greece’s debt crisis remains in focus. Both houses of Germany’s parliament approved the country’s contribution to the joint European Union-International Monetary Fund loan package for Greece. The finance ministers of the Group of Seven leading economies are to hold a telephone conference to discuss the Greek debt turmoil.
Lawyers for Goldman Sachs (GS) began discussions with the Securities and Exchange Commission regarding a settlement over a possible settlement of the agency’s fraud lawsuit. The Wall Street Journal reported that the two sides are far apart in their initial negotiations.
For a detailed rundown on Friday’s trading session see our market story.
Winners
The S&P 500 VIX Short-Term Futures Index fund (VXX) notched a 40.9% gain during the turbulent week. The Short S&P 500 ProShares (SH) picked up 7.3%.
Losers
The iShares MSCI Austria Investable Market Index fund (EWO) dropped 17.1% for the week amid the selloff of European names. The Market Vectors Russia fund (RSX) shed 15.9%.
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