US stocks took a beating this week, only to face more turbulence from Europe as Greece grapples with rising political uncertainty that could cost the country its crucial EU-IMF bailout.
Investors are looking to “catch their breath” after a stressful beginning to the year, Gregori Volokhine of Meeschaert said.
However, “with the challenges coming from Europe, it is very difficult,” he said.
The main stock indices posted a second straight week in the red.
The blue-chip Dow Jones Industrial Average lost 1.7 percent over the week, closing on Friday at 12,820.60.
The broader Standard & Poor’s 500 fell 0.76 percent to 1,353.39, while the tech-rich NASDAQ also shed 0.76 percent, to 2,933.82.
In debt-wracked Greece, another election was almost certain after austerity opponents blocked the formation of a new government again on Friday.
Socialist party boss Evangelos Venizelos was the third party leader to try and fail to cobble together a government after inconclusive elections last Sunday.
Analysts at Charles Schwab & Co said that Europe’s troubles were overshadowed on Friday on Wall Street by shocks from the world’s two biggest economies.
“China released a plethora of disappointing data today, accentuated by industrial production expanding at its slowest pace since 2009. Back in the US, JPMorgan Chase disclosed a US$2 billion trading loss on a failed hedging strategy,” they said.
The disclosure by JPMorgan, which has been leading the industry’s fight against new US financial regulations, sparked calls from politicians and analysts for tighter reins on government-insured banks trading on their own portfolios.
JPMorgan’s blunder battered markets on Friday, but stocks showed resilience, paring opening losses to end mostly lower, with only the NASDAQ making a fractional gain.
A smattering of modestly better US economic data this week helped to take the sting off poor jobs data for last month on Friday.
New claims for unemployment benefits, a sign of the pace of layoffs, fell for a second straight week.
The US trade gap widened in March, but analysts focused on record imports as a sign of sturdy demand.
With energy prices sinking 1.4 percent last month, US wholesale prices fell for the first time this year, reaffirming the US Federal Reserve’s view that inflation remains subdued. Consumer prices data is scheduled for Tuesday.
“Most recent indicators suggest that the disappointing April jobs data were more of a technicality than representing a fundamental slowdown,” Douglas Porter of BMO Capital Markets said.
“Receding jobless claims, strong import growth and easing gasoline prices all hint that the economy will improve in the months ahead,” he added.
The highlight of next week’s calendar will be the minutes of the Federal Reserve’s April 24 and April 25 policy meeting.
Investors are expected to pore over the Federal Open Market Committee information for clues to the direction of the US economy and interest rates.
Retail sales numbers for last month are due on Tuesday, followed on Thursday by last month’s construction starts and building permits, and the weekly jobless claims data.
However, the big buzz building on Wall Street is being generated by Facebook, the world’s leading social network, which is expected to make its long-awaited stock market debut next on Friday.