Sun, Sep 04, 2011 - Page 10 News List

US stocks slide further after a dismal month

AFP, NEW YORK

Another down week in US stocks capped off the dismal month last month on Friday, with bad jobs figures and a sweeping government lawsuit against banks over mortgage-backed securities canceling out a tentative rise.

With more signs that the economy is stagnating, analysts expressed little optimism for the coming week as well.

The Dow Jones Industrial Average of blue chips lost 0.4 percent for the week, thanks to a 2.2 percent plunge on Friday; it ended at 11,240.26.

The broad-based S&P 500 had a 0.2 percent drop for the week, on the back of a 2.5 percent loss on Friday, to 1,173.97.

The tech-heavy NASDAQ Composite just barely kept its head above water, managing a small 0.02 percent gain, despite falling 2.6 percent on the last day. It ended at 2,480.33.

“Aggressive selling on Friday extended a slide that started on Thursday. That effectively erased gains staged in the first half of the week, giving the stock market a fractional weekly loss,” Briefing.com said.

The week ended with the government reporting last month’s jobs data much worse than anticipated: The economy generated virtually no new positions last month, and the unemployment rate remained at 9.1 percent.

Also capping the week was the government’s massive suit against 17 US and foreign banks over nearly US$190 billion in allegedly fraudulent or badly-documented mortgage-backed securities bought by home-loan backers Fannie Mae and Freddie Mac.

Reports of the pending suit — finally announced after the market’s close — boosted big losses in financials that had begun a day earlier.

Bank of America was down 6.6 percent for the week, most of it lost on Friday. Citigroup lost 4.8 percent; JPMorgan Chase 4.4 percent; Goldman Sachs 4.2 percent and Morgan Stanley 3.9 percent.

AT&T was down 3.4 percent, mainly on Wednesday’s shock announcement that the US government would try to block its takeover of T-Mobile on anti-trust grounds.

A big beneficiary of that news was Sprint Nextel, gaining 8.6 percent; many analysts had thought an approved merger would spell the death of the smaller cellphone carrier.

In the coming week — to be shortened by tomorrow’s Labor Day holiday — eyes will be on US President Barack Obama’s push for new jobs creation initiatives, to be unveiled in a speech before Congress on Thursday.

But not many expect anything that would move the markets; with Greece under pressure, the eurozone’s plight could have an impact.

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