LONDON: U.S. stocks fell sharply Friday, extending a multiday tumble and logging their worst weekly losses in months as lackluster retail data and slumping commodities combined to sap demand for equities.
The S&P 500 index turned negative for the year and fell below its 200-day moving average, a critical support level, which many market technicians view as a bearish sign.
Friday’s losses followed disappointing earnings from big department stores such as Nordstrom Inc. and J.C. Penney Co., while weaker-than-expected data on retail sales and inflation added to the dour mood, analysts said.
“This lower run may surprise few on Wall Street considering continued energy weakness and worries that improving job conditions aren’t translating to robust consumer spending,” wrote J.J Kinahan, chief equity strategist at TD Ameritrade, in a blog post.
The S&P 500 SPX, -1.12% fell 22.93 points, or 1.1%, to 2,023.04, with nine of its 10 sectors closing lower. Consumer-discretionary and technology stocks led the decliners, while materials gained. The benchmark index fell 3.6% over the week, its worst weekly fall since Sept. 4.
The Dow Jones Industrial Average DJIA, -1.16% sank 202.83 points, or 1.2%, to 17,245.24 and lost 3.7% over the week, also its worst weekly drop since September. Among the blue-chip companies, 28 posted weekly losses, with Cisco Systems Inc. CSCO, -5.82% Exxon Mobil Corp. XOM, -1.65% Nike Inc. NKE, -3.27% and Apple Inc. AAPL, -2.92% falling more than 7% since Monday.
The Nasdaq Composite COMP, -1.54% declined 77.20 points, or 1.5%, to 4,927.88 and finished the week 4.3% lower, the tech-heavy indexes worst weekly drop since Aug. 21.
The most pressing concerns for investors over the week were European economy, weak economic data from China and the prospect of a Federal Reserve interest-rate hike in December.
“Softer GDP data in Europe is suggesting that growth there is not robust. In an environment of rising rates and stronger dollar, weak economic data results in a cautious sentiment among investors,” said Brian Fenske, head of sales trading at ITG.
On the U.S. data front, Friday’s economic reports pointed to sluggish consumer spending and stubbornly low inflation.
