Closing Update: Stocks Extend Losses On Global Economic Shocks, Fed Jitters, Geo-Political Pressures
Wall Street limped into the close for a fourth straight day as global economic shocks coupled with lingering worries about tighter Federal Reserve policy extended Thursday's freefall in equities. The Dow Jones Industrial Average logged its deepest weekly drop in six months. The benchmark S&P 500 logged a weekly loss of about 2.6%, its largest slide since the week ended April 11. The July jobs data helped calm investors' concerns about interest-rate timing, but the Portuguese banking situation and deteriorating conditions in the Middle East overshadowed mostly market friendly economic data.
For the week, the Dow Jones Industrial Average lost 2.7%, for the biggest weekly drop in some six months, while the S&P 500 lost 2.7% of its value, its biggest weekly drop since the week ended April 11. The Nasdaq was down 2.2%.
The July jobs report showed health job growth but without wage gains and with a small decline in the jobless rate due to an increase in the participation rate. While new non-farm payrolls were still above the 200,000 market, July's 209,000 missed estimates by -21,000.
The remaining data was mixed with personal income and spending both gaining an as-expected 0.4% and consumer confidence improving slightly from June. The manufacturing indices from Markit and Institute for Supply Management were mixed as well; PMI was down to 55.8 from June's 57.3, but ISM rose to 57.1 in July from 55.3 the month prior.
Finally, construction spending plunged 1.8% in June, missing the consensus estimate for a 0.5% gain.
European equities were hit especially hard by the fallout from Portugal's Banco Espirito Santo (BES) even as the Portuguese central bank tried to save the bank by what analysts are calling "backdoor nationalization." Shares of BES hit another record low on Friday, plunging by more than 40%. Pressure on European banking shares spilled into the broader markets, exacerbated by weak EU-zone manufacturing data last night and the likely impact Russian sanctions will have on the European economy.
Here's where the markets stand at the close:
Dow Jones Industrial Index was down 69 points (-0.4%) at 16,493
S&P 500 was down 5 points (-0.3%) at 1,925
Nasdaq Composite Index was down 17 points (-0.4%) at 4,352
FTSE 100 was down 0.76%
Nikkei 225 was down 0.63%
Hang Seng Index was down 0.91%
Shanghai China Composite Index was down 0.74%
(+) BYI Agreed to be bought by Scientific Games ( SGMS ) for $5.1 billion
(+) MBLY Well- received IPO of 35 million shares priced at $25
(+) LNKD Reported better than expected Q2 results and guidance
(+) HTCH Beat Q2 earnings estimates
(+) DGI Swings to Q2 profit and top EPS estimates
(-) BOTA Flu drug LANI doesn't achieve desired reduction in symptoms
(-) YRCW Posts wider than expected Q2 loss, revenue in line with estimates
(-) KEYW Reports wider Q2 loss, beats on revenue
(-) JIVE Downgraded to Neutral by Credit Suisse on downward revision to billings