Good summary of the market turmoil today from Marketwatch:
The Dow Jones Industrial Average (DOW:DJIA) fell 103 points, or 0.9%, to 11,178, its lowest level since Nov. 2, the day of the U.S. congressional midterm elections. The Dow had surged nearly 220 points the following day, when the Federal Reserve announced its $600 billion bond-buying program.
The Dow has fallen 2.5% this week on worries about the consequences of the Federal Reserve’s quantitative-easing program. Renewed concentration on Europe’s sovereign-debt issues added to fears over the global economy.
“We’ve digested the third-quarter earnings and now we see the macroeconomic concerns come back to the fore,” said Benny Lorenzo, chairman and chief executive of Kaufman Brothers. On Friday, stocks slid as concerns were reignited that China could be moving toward further tightening of its monetary policy.
The Nasdaq Composite Index (NASDAQ:COMP) fell 1.5% to 2,518. The S&P 500 Index (MARKET:SPX) shed 1.3% to 1,198.
Materials and energy stocks led the measure’s decline as investors worried demand could slide if China, a big user of natural resources, cools its economy. Fertilizer producer CF Industries (NYSE:CF) slid 5%, while Freeport-McMoRan Copper & Gold (NYSE:FCX) sank 4.5% and metal processor Allegheny Technologies lost 3.2%. Aluminum maker Alcoa (NYSE:AA) dropped 2.5%.
Crude-oil prices slid more than 3%, and gold futures dropped nearly 3%.
Stocks plummet in ChinaWhy stocks in Shanghai plummeted more than 5% on Friday.
Not all investors fretted over potential tightening in China.
“They’re taking prudent measures to keep their inflation in check,” said Brian Peardon, wealth adviser at Harrison Financial Group. “It’s not going to kill their growth, it’s just going to keep it in control.”
Boeing (NYSE:BA) was the Dow’s worst performer on Friday, shedding 3% after Bernstein Research cut its investment rating on the company to market perform from outperform, citing “greater margin risk” on the 787 aircraft.
Walt Disney (NYSE:DIS) was one bright spot for the Dow, surging 5.2% after its quarterly profit declined 6.7%, though some of the weakness was due to one-time events and its quarterly period included one less week than the same period in 2009. Disney’s movie studio swung to an operating income of $104 million, helped by “Toy Story 3.”
“The fundamentals are pretty strong when you take out the one-time items,” Lorenzo said.
Intel (NASDAQ:INTC) rose 1.5% after its board approved a 15% dividend increase starting with the first quarter as the semiconductor maker said it continues to generate strong cash flows.
The U.S. dollar weakened against the euro, which was trading (REUTERS:USDEUR) recently at $1.3679, up from $1.3659 late Thursday in New York.
Demand for Treasurys declined, sending the 10-year note’s yield (U.S.:UST10Y) up to 2.73%.