Friday, August 19, 2011
NEW YORK (AP) — A growing belief that the country is headed toward recession gave the stock market its fourth straight week of losses.
The anxiety in the market was obvious today as the major indexes went from modest gains early in the day to another sharp loss. The Dow Jones industrial average had its 10th move of more than 100 points this month.
“We just don’t know whether we’re going to have a recession,” said John Burke, head of Burke Financial Strategies.
Investors began the week on a more confident note after last week’s volatility, the worst the market has had since the 2008 financial crisis. The Dow rose nearly 215 points on Monday when Google, Time Warner Cable and Cargill were among companies announcing multi-billion deals. The market remained relatively calm the next two days. But on Thursday, a stream of bad economic news in the U.S. combined with worries about Europe’s debt problems and sent the Dow down 419 points.
Today, there was little news to help investors determine their next moves. And some traders did not want to take the chance of holding stocks if bad news came out of Europe over the weekend. So they began selling during the afternoon. European investors were also cautious — banking stocks fell near two-and-a-half-year lows, dragged down by rumors about banks’ potential losses on bonds issued by heavily-indebted governments.
“These things usually break out over the weekend and then you have a mad dash Monday to react to them,” said Mike McGervey, the head of McGervey Wealth Management.
The drop late in the day recalled the 2008 financial crisis. Then, many investors stepped up their selling on Friday afternoons out of fears that another bank might fail over the weekend — as Lehman Brothers did on Sunday, Sept. 15.
The Dow lost 172.93, or 1.6 percent, and closed at 10,817.65. It was down 4 percent for the week. Since July 21, right before the market began its plunge, the Dow is down 15 percent.
The Standard & Poor’s 500 stock index fell 17.12, or 1.5 percent, to 1,123.53. It was down 4.7 percent for the week. The Nasdaq composite fell 38.59, or 1.6 percent, to 2,341.84. It was down 6.6 percent for the week.