Sun, Dec 18, 2011 - Page 10 News List

US stocks fall to break two-week streak of gains


US stocks fell, driving the Standard & Poor’s 500 Index to this month’s first weekly loss, as European leaders struggled to solve the region’s debt crisis and the US Federal Reserve refrained from additional stimulus.

Equities rose the last two days of the week as data on jobless claims and manufacturing offset concern that Europe’s crisis is escalating. Energy producers dropped 4.9 percent this week, the most among 10 groups in the S&P 500.

Caterpillar Inc and Alcoa Inc slumped at least 8.6 percent. Intel Corp slid 7.1 percent, pacing declines among technology companies. Research In Motion Ltd tumbled 18 percent after delaying the next generation BlackBerry, which is designed to fuel a comeback.

The S&P 500 fell 2.8 percent to 1,219.66, breaking a two-week streak of gains. The Dow Jones Industrial Average sank 317.87 points, or 2.6 percent, to 11,866.39 this week.

“The market continues to be driven by headline stories about Europe, although the economic news has been more positive with respect to the US,” John Carey, a Boston-based money manager at Pioneer Investments, said in a telephone interview. The firm oversees about US$220 billion. “On alternate days, people are either paying attention to those improving fundamentals or worrying about what’s going on in Europe.”

Stocks slumped on Monday as Moody’s Investors Service said a EU summit failed to produce “decisive policy measures” and Fitch Ratings said a comprehensive solution has not yet been offered.

The S&P 500 extended its decline the next day following the Fed’s decision.

The S&P 500 rebounded from a three-day slump on Thursday after Labor Department figures showed initial jobless claims fell by 19,000 to 366,000 last week, the fewest since May, 2008, and two reports showed manufacturing in the New York and Philadelphia regions expanded more than forecast this month.

The index has failed to maintain gains, falling 3 percent since the end of last year after being up for the year on nine days since Oct. 27.

It fell within 1 percent of a bear market, or a 20 percent plunge, from its high on April 29 with its slump through Oct. 3. The measure has rebounded 11 percent since then.

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