November 27, 2010 in Business

Koreas, Europe weigh on market

Matthew Craft And Pallavi Gogoi Associated Press
 

NEW YORK – Stocks sank during Friday’s shortened session as jittery traders were afraid to commit to any holdings ahead of the weekend amid lingering uncertainty surrounding Europe’s debt troubles and North Korea’s war threats.

European stock markets and the euro fell as worries mounted that Portugal will be the next country to need cash from other European Union countries, even as details of Ireland’s bailout were being worked out.

On Friday, Portugal adopted a raft of debt-reducing austerity measures, which the government claimed would be enough to restore market confidence in its public finances without resorting to a bailout.

However, that didn’t soothe traders who are also nervously eyeing North Korea’s threat of war, which could destabilize its neighboring Asian nations. North Korea warned Friday that plans by South Korea and the U.S. to stage military maneuvers have put the Korean peninsula on the brink of war. North Korea fired artillery shells at a South Korean island on Tuesday, killing four people.

For the day, the Dow Jones industrial average fell 95.28, or 0.9 percent, to 11,092. The S&P 500 index was down 8.95, or 0.8 percent, to 1,189.40. The Nasdaq composite index fell 8.56, or 0.3 percent, to 2,534.56.

Friday also marks the unofficial start of the holiday shopping season. Black Friday, a crucial event for retailers, was off to a strong start, according to early reports.

It was the end of a rollercoaster week. Stocks fell on Tuesday after North Korea’s shelling, but surged on Wednesday after a batch of economic reports buoyed hopes that the U.S. economic recovery was gaining strength. The reports showed that Americans’ income rose and consumer spending climbed in October. And fewer people filed first-time claims for unemployment benefits last week.

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