After eight straight weeks of gains, US stocks fell prey to a series of mixed company earnings and economic indicators, and exploding unrest in Egypt that sent investors scurrying for safety.
The blue-chip Dow Jones Industrial Average lost 0.41 percent over the week on the New York Stock Exchange, finishing at 11,823.70 points on Friday.
The S&P 500 index, a broader measure of the market, closed at 1,276.34 points, down 0.55 percent.
The tech-rich NASDAQ lost 0.10 percent at 2,686.89 points.
Both the Dow and the S&P 500 indexes broke briefly through key resistance levels during the week, but failed to hold the momentum.
The Dow crossed 12,000 on Wednesday for the first time since June 2008. The S&P 500 breached 1,300 on Thursday and Friday, the index’s first foray above the symbolic threshold since August 2008.
SOUR SENTIMENT
However, sentiment turned decidedly sour Friday, knocking out the week’s gains in a single day.
“The stock market suffered through its worst one-day sell-off since November as unrest in Egypt and a disappointing economic report gave investors a convenient reason to take profits,” Scott Marcouiller at Wells Fargo Advisors said.
The S&P 500’s volatility index shot up 24 percent.
ECONOMIC GROWTH
Meanwhile, the US government reported on Friday the economy grew at its fastest pace in five years last year. GDP growth hit 2.9 percent for the year, reversing the 2.6 percent contraction seen in 2009, but the final quarter was weaker than expected.
“Growing instability in the Middle East overshadowed a strong US GDP report,” Michael Bratus at Moody’s Analytics said. “Although the economy grew slower than forecast in the fourth quarter, consumer spending was strong, heralding a better performance in 2011. Yet fears that riots in Egypt could spread weighed heavily on US equities.”
The first four trading sessions of the week were marked by signs of caution as some companies posted lackluster financial results and data painted a mixed picture of an economy struggling to recover from recession.
“We have not seen the same number of companies lift current-quarter earnings guidance as seen near the halfway point of last quarter’s reporting cycle,” Frederic Dickson at DA Davidson & Co said.
The flood of quarterly earnings is set to continue next week, with three of the Dow’s 30 components weighing in: oil giant ExxonMobil tomorrow, pharmaceutical firm Pfizer on Tuesday and its rival Merck on Thursday.
The economic calendar brings some key snapshots on how the economy fared at the start of this year.
Capping the week will be the keenly awaited monthly jobs report from the US Department of Labor.
Analysts expect the data to show the US unemployment rate rose two-tenths of a percentage point to 9.6 percent this month.
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