BackWall Street ends the week flat as oil prices weigh
Wall Street ends the week flat as oil prices weigh
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New York: Wall Street erased most of its weekly gains on Friday as fears of more geopolitical turmoil and higher oil prices threaten to stifle rallies in coming weeks.
The worries overshadowed strong labor market news. US unemployment fell below 9% for the first time in nearly two years, but investors quickly turned to focus on intensified fighting in Libya and simmering unrest throughout the region.
Brent crude prices rose above $116 a barrel and the CBOE Volatility Index VIX, Wall Street’s so-called fear gauge, rose 2.7% to 19.11.
“After the kind of rally we had, the market is more vulnerable to news events and more so these days on a spike in oil prices," said Randy Frederick, director of trading and derivatives at the Schwab Center for Financial Research in Austin, Texas.
Data earlier in the week had raised expectations about Friday’s employment report, lifting stocks to their biggest gains in three months on Thursday.
But bank shares fell after Bank of America Merrill Lynch said first-quarter earnings could be hurt by rising oil prices as well as by reduced client activity.
The brokerage downgraded shares of Citigroup Inc and Goldman Sachs Group Inc to “neutral" from “buy."
Goldman fell 2.1% to $161.00 and Citi dropped 3% to $4.54. The KBW bank index lost 1.5%.
The Dow Jones industrial average was down 88.32 points, or 0.72%, at 12,169.88. The Standard & Poor’s 500 Index was down 9.82 points, or 0.74%, at 1,321.15. The Nasdaq Composite Index was down 14.07 points, or 0.50%, at 2,784.67.
For the week, the Dow rose 0.3% and the S&P and the Nasdaq both gained 0.1%.
About 7.73 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, below last year’s daily average of 8.47 billion.
The Labor Department said payrolls rose by 192,000 in February, slightly above the 185,000 gain forecast in a Reuters poll, and the unemployment rate unexpectedly dipped to 8.9% from 9%.
Among consumer-related shares, the homebuilding sector was hurt the most. The PHLX housing index fell 1.3% with Weyerhaeuser down 2.2% to $23.57. KB Home shares dropped 2.6% to $13.08 and MDC Holdings fell 2.6% to $24.99.
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