Stocks slide to a slump at week’s end

December 18, 2011

U.S. stocks fell, driving the Standard & Poor’s 500-stock index to this month’s first weekly loss, as European leaders struggled to solve the region’s debt crisis and the Federal Reserve refrained from additional stimulus.

Equities rose the last two days of the week as data on jobless claims and manufacturing offset concern that Europe’s crisis is escalating. Energy producers dropped 4.9 percent last week, the most among 10 groups in the S&P 500. Caterpillar and Alcoa slumped at least 8.6 percent. Intel slid 7.1 percent.

The S&P 500 fell 2.8 percent to 1219.66, breaking a two-week streak of gains. The Dow Jones industrial average sank 317.87 points, or 2.6 percent, to 11,866.39 last week.

“The market continues to be driven by headline stories about Europe, although the economic news has been more positive with respect to the U.S.,” said John Carey, a money manager at Pioneer Investments, which oversees about $220 billion.

Stocks slumped Monday as Moody’s Investors Service said an E.U. summit failed to produce “decisive policy measures” and Fitch Ratings said a comprehensive solution has not yet been offered. The S&P 500 extended its decline the next day after the Fed’s decision.

The Treasury will sell $29 billion in three-month bills and $27 billion in six-month bills Monday. They yielded minus 0.005 percent and 0.031 percent, in when-issued trading. The U.S. will also sell $35 billion in two-year notes Monday, $35 billion in five-year notes on Tuesday and $29 billion in seven-year notes Wednesday. They yielded 0.22 percent, 0.799 percent and 1.304 percent.

— Bloomberg News

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