Stocks end down again as investors can’t shake unease
On Monday, stock indexes had finally recovered from the huge sell-off of the previous week, after the downgrade of US long-term debt by Standard & Poor’s late Aug. 5 unleashed days of painful market turmoil.
But by midweek, stocks were falling again, as investors worried about Europe’s debt crisis and the possibility of recession in the United States intensified. The Standard & Poor’s 500 stock index slid 1.5 percent yesterday and closed down more than 4 percent for the week.
It was the fourth consecutive week of market declines as investors remained rattled. The latest signs of strain came from some European banks laden with debt from the region’s troubled economies - strains that could spread across the Atlantic.
Next week, the market’s attention will turn to the Federal Reserve’s annual symposium in Jackson Hole, Wyo., for signs of how confident the chairman of the Fed, Ben S. Bernanke, is about the strength of the US recovery.
At last year’s symposium, faced by a similar midyear slowdown, Bernanke paved the way for a second round of large-scale bond purchases. But after the Fed this month already promised to keep short-term interest rates close to zero for the next two years, few economists expect further stimulus from the Fed.
Stocks of companies most susceptible to slow growth and those related to banks have been hit. Technology, financials, and industrials were among the sectors down more than 1 percent yesterday.
At the close, the S&P 500 was down 17.12 points at 1,123.53. The Dow Jones industrial average fell 172.93 points to 10,817.65. The Nasdaq composite index lost 38.59 points to 2,341.84.
Some of the downturn was attributed to technical reasons. Yesterday was a day when options contracts expire, an event that can fuel volatility.
Analysts also pointed out that on a day before a summer weekend, low volumes could unfold into a “bleed’’ toward the end of the trading session - and indeed, what had been a relatively placid trading session in New York turned downward in the final hours.