August 6, 2011 in Business

Dow down 5.8 percent for week

Daniel Wagner And Stan Choe Associated Press
 

NEW YORK – The Dow Jones industrial average bounced up and down, sometimes by as much as 100 points in less than half an hour Friday. It ended the day up 61 points, or 0.5 percent.

In Europe, debt problems are spreading, threatening Italy and Spain, the continent’s third- and fourth-largest economies. In the U.S, a possible debt default was averted earlier this week, but concerns remain. Chief among them: less spending by consumers, which is leading to anemic growth by both manufacturing and service companies and too few new jobs to lower the unemployment rate significantly.

Investors also worry that the federal government is more likely to hurt the economy than help it. Instead of more spending, the government is trying to reduce its budget deficits by spending less.

All three major stock indexes are in correction. That is, they are down 10 percent or more off their recent highs.

The Dow fell 5.8 percent this week. It plunged 513 points on Thursday alone, the worst day for the Dow since 2008.

The S&P 500, the benchmark for most mutual funds, fell 0.1 percent Friday. It fell 7.2 percent for the week and is down 10.8 percent since July 22, when its steady declines began.

The Nasdaq composite index fell 24 points, or 0.9 percent. It is down 11.4 percent since July 22.

Commodities also fell on worries that weaker global economies will mean less demand. Crude oil fell $8.82, to $86.88 over the week.

Overseas markets also fell Friday. Tokyo, Hong Kong and China all closed down more than 2 percent. Taiwan lost 5.6 percent. The U.S. economy added 117,000 jobs in July, and 56,000 more were added in May and June than reported previously, the Labor Department said. The unemployment rate inched down to 9.1 percent from 9.2 percent, partly because some unemployed workers stopped looking for work, so they were no longer counted as unemployed. Health care providers and manufacturers added jobs.

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