Stocks slide on worries over Korea, European debt
NEW YORK – Stocks sank during Friday's shortened session as jittery traders were afraid to commit to any holdings ahead of the weekend amid lingering uncertainty surrounding Europe's debt troubles and North Korea's war threats.
European stock markets and the euro fell as worries mounted that Portugal will be the next country to need cash from other European Union countries, even as details of Ireland's bailout were being worked out.
On Friday, Portugal adopted a raft of debt-reducing austerity measures, which the government claimed would be enough to restore market confidence in its public finances without resorting to a bailout.
However, that didn't soothe traders who are also nervously eyeing North Korea's threat of war, which could destabilize its neighboring Asian nations. North Korea warned Friday that plans by South Korea and the U.S. to stage military maneuvers have put the Korean peninsula on the brink of war. North Korea fired artillery shells at a South Korean island on Tuesday, killing four people.
The Dow Jones industrial average fell 95.28, or 0.9 percent, to 11,092. The S&P 500 index was down 8.95, or 0.8 percent, to 1,189.40. The Nasdaq composite index fell 8.56, or 0.3 percent, to 2,534.56.
"Until there's final resolution of both Spain and Portugal investors will continue to be fearful," said John O'Donoghue, co-head of equities at Cowen & Co.
The 16-nation euro fell to $1.3244 in midday trading Friday from $1.3368 late Thursday, earlier dipping below $1.32 for the first time since Sept. 21. The Euro Stoxx 50, which tracks the shares of blue chip companies in countries that use the euro, slipped 0.7 percent.
Preliminary volume on the New York Stock Exchange of 428 million was about half of the usual volume as trading desks were thinly staffed on the day after Thanksgiving. Falling shares outpaced rising ones by two to one on the New York Stock Exchange. U.S. stock markets closed at 1 p.m. EST Friday instead of the usual 4 p.m. Markets were closed on Thursday for the holiday.
Friday also marks the unofficial start of the holiday shopping season. Black Friday, a crucial event for retailers, was off to a strong start, according to early reports.
Many stores pushed more exclusive deals online on Thursday in a bid to rope in shoppers before Black Friday. It apparently worked. According to IBM's Coremetrics, online sales soared 33 percent on the holiday compared with Thanksgiving 2009.
Sales during the Thanksgiving weekend made up 12.3 percent of all holiday revenue last year, according to research firm ShopperTrak. Black Friday accounted for half of that.
Macy's Inc. shares were up 11 cents to $26.
It was the end of a rollercoaster week. Stocks fell on Tuesday after North Korea's shelling, but surged on Wednesday after a batch of economic reports buoyed hopes that the U.S. economic recovery was gaining strength. The reports showed that Americans' income rose and consumer spending climbed in October. And fewer people filed first-time claims for unemployment benefits last week.
Overall, stocks ended the week mixed. The Dow ended 112 points lower, and the Standard & Poor's 500 index lost 10. However, the technology-heavy Nasdaq composite index gained 17 points for the week.