Stocks fall as yen rises
Stocks stumbled in the final session of a tumultuous week Friday as the yen rallied against the dollar and concerns about the U.S. economy still dogged investors after Tuesday’s huge drop.
The Dow Jones industrials logged their worst weekly performance in more than four years.
The Dow, as it had Thursday, poked tentatively into positive territory Friday before retreating as the yen furthered its gains and investors failed to shake their unease.
Larger economic concerns such as the ascendent yen have dominated Wall Street for much of the week after Tuesday’s worldwide selloff that sent the Dow down 416 points and rattled investor confidence about the state of the U.S. economy.
Neil Massa, senior trader at MFC Global Investment Management, said stocks wobbled Friday after the yen broke through a key resistance level of 116.80. The dollar fell 0.92 percent to 116.86 yen.
Concerns lingered about a decline in the yen carry trade, which refers to the process of borrowing yen to acquire assets with greater yields in other currencies. A slowdown could hurt liquidity worldwide. Concerns about Japanese interest rates also weighed on investors.
A well-received profit report from American International Group Inc. kept the Dow industrials from falling further Friday; the insurer and pharmaceutical company Merck & Co. were the only two advancers among the index’s 30 stocks. Merck, which received a mixed verdict Friday in a trial over its former painkiller Vioxx, finished up 20 cents at $44.19.
The Dow fell 120.24, or 0.98 percent, to 12,114.10. The Dow has fallen seven of the last eight sessions.
Broader stock indicators also fell. The Standard & Poor’s 500 index fell 16.00, or 1.14 percent, to 1,387.17 and the Nasdaq composite index slid 36.21, or 1.51 percent, to 2,368.00.
For the week, the Dow fell 3.3 percent, the S&P 500 lost 4.4 percent and the Nasdaq fell 5.9 percent. For the Dow and the S&P 500, it was their biggest weekly point drop since the week ended July 19, 2002. And for the Nasdaq, it was the poorest weekly showing since the week ended Sept. 21, 2001, the first week of trading after the 9/11 terror attacks.
Bond prices rose sharply as economic concerns lingered and raised hopes for an interest rate cut. The yield on the benchmark 10-year Treasury note fell to 4.51 percent from 4.55 percent late Thursday. The dollar was mixed against other major currencies, while gold prices fell sharply.
Light, sweet crude settled down 36 cents to $61.64 per barrel on the New York Mercantile Exchange after settling at a more than two month high Thursday.
Declining issues outnumbered advancers by about 3 to 1 on the New York Stock Exchange, where volume came to 1.86 billion shares, compared with an unusually heavy 2.22 billion shares traded Thursday.
The Russell 2000 index of smaller companies fell 15.59, or 1.97 percent, to 775.44.
Overseas, Japan’s Nikkei stock average closed down 1.35 percent, while the Shanghai Composite Index was up 1.23 percent and Hong Kong’s Hang Seng index added 0.49 percent. Britain’s FTSE 100 finished higher by less than 0.01 percent, Germany’s DAX index fell 0.56 percent, and France’s CAC-40 slid 0.62 percent.