Crisis in Libya sends stocks sliding
U.S. stocks fell last week, driving the Standard & Poor's 500-stock index to the biggest drop in three months, as a jump in oil prices on speculation Libya is headed for war spurred concern that economic growth will slow.
The S&P 500 pared its weekly slump Friday as confidence among American consumers beat forecasts and climbed to the highest level in three years. Hewlett-Packard and Wal-Mart lost more than 6.6 percent last week after their results missed forecasts. General Electric fell 2.9 percent as industry groups that are more dependent on economic growth led the declines in the S&P 500. Higher oil prices boosted energy shares, the only gain among 10 S&P 500 groups.
The S&P 500 declined 1.7 percent to 1,319.88 for the week, the first drop after three straight weeks of gains. The index retreated 2.1 percent on Feb. 22, its biggest one-day drop since Aug. 11. The Dow Jones industrial Average dropped 260.80 points, or 2.1 percent, to 12,130.45.
"The events in Libya were the key driver," said David Joy of Columbia Management. "Investors are afraid that a tightening of oil supplies will lead to extraordinarily higher prices, which will divert spending from other parts of the economy and maybe even force a rethinking of forecasts for global growth going forward."
The S&P 500 fell after climbing to the highest level since June 2008 on Feb. 18. The decline lowered the gauge's 2011 advance to 5 percent after a 13 percent rally in 2010.
The Treasury will sell $32 billion in three-month and $30 billion in six-month bills on Monday. They yielded 0.127 percent and 0.168 percent in when-issued trading.
- Bloomberg News