A sluggish session on Friday capped the worst week for stocks since July 2. Volume was thin, and after fluctuating throughout the day, the market finished significantly lower. Mixed economic data did little to reassure investors, and retail earnings failed to meet expectations. The Dow Jones Industrial Average dropped 16.8 points (-0.16%) to finish at 10,303.15—marking its third consecutive losing session. The S&P 500 lost 4.34 points to close at 1079.27 (-0.40%), and the NASDAQ finished 16.79 points lower to end the day at 2173.48 (-0.77%). Consumer discretionary, technology, and health care stocks were among the worst performers in the S&P though utilities managed to finish higher. J.C. Penney, Nordstrom, Kohl’s, and Macy’s were especially hit hard, videogame makers Electronic Arts and Activision Blizzard remained flat, and both Google and Oracle ended lower. The CBOE Volatility Index, the standard gauge of anxiety in the market, rose above 26.
YTD Stock Market Performance
Much of this anxiety was prompted by the Federal Reserve’s increasingly negative view of the US economy and accumulating evidence—on the basis of jobless claims, retail sales numbers, and other traditional indicators—of a stalled recovery. A marginal increase in retail sales was confined principally to automobiles and gasoline station sales. Worries were compounded by weakness across the southern Euro zone, with investors anxious about how the situation in Europe might affect the global economy. The euro lost close to 4 percent of its value against the dollar as a result.
Crucially, all major indices are negative for the year. The NASDAQ is off 4.22 percent, the S&P 3.2 percent, and the Dow 1.2 percent. For the week, Verizon rose 1.5 percent, helping to buoy the Dow and S&P, if only slightly–though a 12.5 percent collapse in HP more than offset that advance. Cisco and Nvidia continue to perform miserably.
With few additional earnings reports due and extremely light trading volumes over recent sessions, it seems clear that investors should expect a sluggish market environment until after Labor Day. On Friday, for example, only 870 million shares changed hands on the NYSE—decliners leading advancers 8 to 7.
In Europe, the FTSE was up 9.38 to finish at 5275.44 (+0.18), the DAX was off 24.76 to close at 6110.41 (-0.4%), and the CAC 40 dropped 10.16 to end Friday’s session at 3610.91 (-0.28%).
In Asia, the Hang Seng and Nikkei were both unchanged, while the Shanghai SE Composite Index rose 31.225 to close at 2606.7 (+1.21%).
Gold was off 0.20 to finish at $1216.4 per ounce (-0.02%), while oil rose 0.20 to close at $75.59 per barrel (+0.27%).
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