US stocks tumbled on Friday to close out the worst week since January as news of a criminal probe into Goldman Sachs unnerved investors already anxious about the prospects for heavy regulation from Washington.
US prosecutors in New York began an investigation into the investment bank, a source told Reuters, raising the possibility of criminal charges two weeks after the Securities and Exchange Commission accused the bank of fraud.
Goldman’s stock fell 9.4 percent to US$145.20, and the company has lost more than US$20 billion of its market value since the SEC charges were filed. The S&P financial index slid 2.5 percent.
“It’s scary, it’s taking down the whole market,” said Dave Rovelli, managing director of US equity trading at Canaccord Adams in New York. “We’re back in the uncertainty phase and whenever there is uncertainty, it’s never good.”
The Dow Jones industrial average fell 158.71 points, or 1.42 percent, to 11,008.61. The Standard & Poor’s 500 Index lost 20.09 points, or 1.66 percent, to 1,186.69.
The NASDAQ Composite Index dropped 50.73 points, or 2.02 percent, to 2,461.19.
This week’s losses, which took place against a backdrop of growing concerns over the potential for sovereign debt defaults in Greece, Spain and Portugal, cut short eight weeks of gains for the Dow industrials and the NASDAQ.
For the week, the Dow fell 1.2 percent, the S&P 500 lost 2.5 percent and the NASDAQ dropped 2.7 percent. The week was the worst since the week ending Jan. 24.
However, the three major US stock indexes have racked up gains for the last three months.
Stocks climbed last month, with a boost from strong earnings. So far, almost 80 percent of S&P 500 companies have beaten earnings estimates.
For last month, the Dow rose 1.4 percent, the S&P 500 gained 1.5 percent, and the NASDAQ climbed 2.6 percent.
In Friday’s session, a massive oil spill in the Gulf of Mexico continued to weigh on the market as investors worried about the potential economic and regulatory impact if the disaster escalates. The White House said it would halt new US offshore oil drilling until a review is conducted into the spill.
The PHLX oil services sector index fell 2.9 percent, with Halliburton Co off 3 percent at US$30.65 and Transocean Ltd down 7.7 percent at US$72.45.
US chip manufacturers’ shares slid after Samsung Electronics Co Ltd, the world’s largest maker of memory chips and flat-screen TVs, said that it would “substantially increase” capital spending this year, stoking fears about excess semiconductor supply.
The semiconductor index dropped 4.5 percent, dragged lower by Intel Corp, the world’s top chip maker, and Micron Technology, one of the world’s largest memory chip makers.
Intel fell 2.8 percent to US$22.84, while Micron Technology tumbled 8.4 percent to US$9.35. The stock of another chip maker, Advanced Micro Devices, lost 6.8 percent to US$9.06.
Shares of MEMC Electronic Materials Inc, which provides silicon wafers to semiconductor makers, plummeted 18.6 percent to US$12.97 a day after reporting worse-than-expected results. Two brokers cut their price targets on the stock and another investment firm cut its recommendation following MEMC’s results.
McAfee Inc shares tumbled 12.1 percent to US$34.75 a day after the security software maker said the cost of fixing a bug that shut down PCs at more than 100 large corporate customers will help push second-quarter earnings below expectations.
About 11.03 billion shares traded on the New York Stock Exchange, the American Stock Exchange and NASDAQ, above last year’s estimated daily average of 9.65 billion.
Beijing’s continued provocations in the Taiwan Strait reveal its intention to unilaterally change the “status quo” in the area, the US Department of State said on Saturday, calling for a peaceful resolution to cross-strait issues. The Coast Guard Administration (CGA) reported that four China Coast Guard patrol vessels entered restricted and prohibited waters near Kinmen County on Friday and again on Saturday. A State Department spokesperson said that Washington was aware of the incidents, and urged all parties to exercise restraint and refrain from unilaterally changing the “status quo.” “Maintaining peace and stability across the Taiwan Strait is in line with our [the
EXTENDED RANGE: Hsiung Sheng missiles, 100 of which might be deployed by the end of the year, could reach Chinese command posts and airport runways, a source said A NT$16.9 billion (US$534.93 million) project to upgrade the military’s missile defense systems would be completed this year, allowing the deployment of at least 100 long-range Hsiung Sheng missiles and providing more deterrence against China, military sources said on Saturday. Hsiung Sheng missiles are an extended-range version of the Hsiung Feng IIE (HF-2E) surface-to-surface cruise missile, and are believed to have a range of up to 1,200km, which would allow them to hit targets well inside China. They went into mass production in 2022, the sources said. The project is part of a special budget for the Ministry of National Defense aimed at
READY TO WORK: Taiwan is eager to cooperate and is hopeful that like-minded states will continue to advocate for its inclusion in regional organizations, Lai said Maintaining the “status quo” in the Taiwan Strait, and peace and stability in the Indo-Pacific region must be a top priority, president-elect William Lai (賴清德) said yesterday after meeting with a delegation of US academics. Leaders of the G7, US President Joe Biden and other international heads of state have voiced concerns about the situation in the Strait, as stability in the region is necessary for a safe, peaceful and prosperous world, Lai said. The vice president, who is to be inaugurated in May, welcomed the delegation and thanked them for their support for Taiwan and issues concerning the Strait. The international community
COOPERATION: Two crewmembers from a Chinese fishing boat that sank off Kinmen were rescued, two were found dead and another two were still missing at press time The Coast Guard Administration (CGA) was yesterday working with Chinese rescuers to find two missing crewmembers from a Chinese fishing boat that sank southwest of Kinmen County yesterday, killing two crew. The joint operation managed to rescue two of the boat’s six crewmembers, but two were already dead when they were pulled from the water, the agency said in a statement. Rescuers are still searching for two others from the Min Long Yu 61222, a boat registered in China’s Fujian Province that capsized and sank 1.03 nautical miles (1.9km) southwest of Dongding Island (東碇), it added. CGA Director-General Chou Mei-wu (周美伍) told a