×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

Wall Street falls on data, Spain downgrade

Wall Street falls on data, Spain downgrade
Comment E-mail Print Share
First Published: Fri, May 28 2010. 11 45 PM IST
Updated: Fri, May 28 2010. 11 45 PM IST
New York: US stocks fell 1% on Friday, extending earlier losses as a downgrade by Fitch Ratings of Spain’s credit rating reignited worries about euro-zone debt issues.
Fitch cut Spain’s credit rating by one notch, saying the country’s economic recovery will be more muted than the government forecast due to its austerity measures.
US-listed shares of Spain’s Banco Santander SA fell 2.5% to $10.17.
“It definitely spooked the market, no doubt about it,” said Terry Morris, senior equity manager for National Penn Investors Trust Company in Reading, Pennsylvania.
“Up until now it’s been mostly Greece and the threat of Spain and Portugal and Ireland. With Fitch actually downgrading Spain, it seems as if it is no longer a hypothetical, the contagion is now real.”
The Dow Jones industrial average dropped 141.25 points, or 1.38%, to 10,117.74. The Standard & Poor’s 500 Index fell 16.17 points, or 1.47%, to 1,086.89. The Nasdaq Composite Index lost 30.63 points, or 1.34%, to 2,247.05.
The downgrade pushed Wall St further into the red, as stocks had fallen earlier after data showed consumer spending was unexpectedly flat last month and growth of US Midwest business activity slowed more than expected.
Data from the Commerce Department showed April was the first month since September that consumer spending did not increase, but the largest gain in real disposable income in nearly a year gave hope that spending will resume in coming months.
A separate report showed business activity in the Midwest grew less than expected in May after scaling a five-year high in April. An employment gauge in the Institute for Supply Management-Chicago’s survey slipped.
Investors also took advantage of the opportunity to book gains heading into a long holiday weekend and after Wall Street’s rally in the previous session. May is on track to be the worst month for stocks since February 2009 after hitting an 18-month high in late April as investors fretted over a debt crisis in Europe and its implications for global growth.
US markets will be closed on Monday for the Memorial Day holiday.
Energy shares ranked among the biggest losers on Friday, a day after the S&P energy index racked up its largest gain in 14 months. The S&P energy index was down 2.4%. Halliburton tumbled 8.1% to $24.80 and Schlumberger fell 6.5% to $55.93.
The US-listed shares of BP Plc shed 5.7% to $42.79 after the company’s chief executive officer said some progress had been made in its bid to plug the leaking Gulf of Mexico oil well, though it could still take 48 hours to conclude whether it has been fully successful.
Apple Inc was among the few bright spots, rising 0.5% at $254.75 after the iPad tablet computer debuted outside the United States and Bank of America-Merrill Lynch raised its price target on the stock by $25 to $325.
The Thomson Reuters/University of Michigan Surveys of Consumers showed consumer sentiment rose a bit in May from April but was roughly unchanged from levels since February, while the one-year inflation expectations index also climbed to its highest since October 2008.
Comment E-mail Print Share
First Published: Fri, May 28 2010. 11 45 PM IST
More Topics: Markets | US | Stocks | Wall Street | Spain |