By Kristina Peterson
The energy sector led U.S. stocks lower Friday, with equities
sliding further into the red in a week punctuated by disappointing
economic data.
The Dow Jones Industrial Average (DJI) fell 105 points. The
measure is now firmly in the red for the week, as disappointing
jobs and manufacturing data on Thursday wiped out gains from
excitement over a resurgence in global merger activity.
Friday's slide in the euro reminded investors of lingering
sovereign debt concerns and added to the week's push and pull
between encouraging corporate news and weaker-than-expected
macroeconomic data. A resurgence in deal activity to the highest
levels since late 2009 contrasted with persistent reminders of the
struggling global economic recovery.
"We're in this mediocre and low-growth path until another year
or so goes by -- to me that's what this week says again," said
Barbara Marcin, portfolio manager of the Gabelli Blue Chip Value
Fund. "We're not back to the levels we were a couple years ago and
therefore people aren't going to hire, and until we get some
employment growth back, we're not going to restore confidence."
The Dow fell 1% to 10,165. Among the measure's worst performers,
Caterpillar (CAT) fell 2.1%, General Electric (GE) shed 2% and
manufacturing giant 3M (MMM) slid 1.8%.
The Nasdaq Composite Index (RIXF) shed 0.7% to 2,165. The
Standard & Poor's 500-share index (SPX) dropped 0.9% to
1,066.
Energy stocks led Friday's decline as crude-oil prices fell more
than 1.4% to below $74 a barrel. Sterne Agee & Leach cut its
stock-investment ratings on land drillers to "neutral" from "buy,"
citing rising service costs, among other factors. Nabors Industries
fell 4.4%, while Patterson-UTI Energy (PTEN) fell 5.3% and
Helmerich & Payne (HP) slid 4.3%.
Multinational companies with overseas operations also slid as
the euro weakened. The common currency touched a one-month low
after a European Central Bank official suggested monetary policy
should remain loose until next year.
The euro was recently trading at $1.2692, down from $1.2819 late
Thursday in New York. The U.S. dollar index (DXY), which tracks the
currency against a basket of six others, jumped 0.8%.
Demand for safe-haven Treasurys rose, pushing the yield on the
10-year note (UST10Y) down to 2.57%. The two-year note's (UST2YR)
yield hit a record low of 0.455% overnight, but edged up slightly
in recent trading to 0.48%.
Light trading in August has kept the market bouncing in a narrow
range. After three hours of trading, less than 2 billion shares had
traded hands in New York Stock Exchange Composite volume, on pace
to fall below the daily average of 5.1 billion.
"The market, being range-bound, is at the mercy of whoever last
spoke and the most recent number. It is very frenetic in its
reaction to news," said Liz Ann Sonders, chief investment
strategist at Charles Schwab.
Among stocks in focus, Hewlett-Packard (HPQ) dropped 2.8%, even
as its profit climbed 6.1% on higher worldwide sales in its fiscal
third-quarter, the technology giant's final quarter with Mark Hurd
at its helm. But investors have been skittish about H-P since Hurd
left the company two weeks ago, during which the stock has lost
about 12% of its value.