Stocks continue downward spiral

September 10, 2011

U.S. stocks fell, driving the Standard & Poor’s 500-stock index to the sixth drop in the past seven weeks, as concern Greece’s finances are deteriorating overshadowed President Obama’s $447 billion jobs plan.

J.P. Morgan Chase and Hewlett-Packard declined more than 6.9 percent last week on concern about a global financial crisis as 27 of 30 Dow Jones industrial average companies retreated. McDonald’s slumped 4.6 percent as August sales trailed analysts’ estimates. Financial and material companies in the S&P 500 fell 2.4 percent or more, the most among 10 industries. Yahoo added 13 percent after the most-visited U.S. Web portal ousted chief executive Carol Bartz.

The S&P 500 fell 1.7 percent to 1154.23, the second straight weekly loss and the lowest level since Aug. 22. The Dow retreated 248.13 points, or 2.2 percent, to 992.13.

“The market is very jittery,” said Jason Hsu, who oversees $83 billion at Research Affiliates. “It’s hoping for good news, but it’s responding very quickly to anything that doesn’t indicate a path to recovery.”

The S&P 500 and Dow wiped out their gains Friday after three German officials said Chancellor Angela Merkel’s government is preparing plans to shore up banks if Greece defaults. The European Central Bank said Jürgen Stark resigned from the executive board, suggesting policymakers are divided over the debt crisis.

The Treasury will sell $29 billion in three-month bills and $27 billion in six-month bills Monday. They yielded 0.01 percent and 0.045 percent in when-issued trading. The Treasury will also sell $32 billion of three-year notes on the same day, $21 billion of 10-year notes Tuesday and $13 billion of 30-year bonds Wednesday.

— Bloomberg News

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