U.S. stocks register weekly gains despite Friday's plunge

10:36, May 15, 2010      

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Wall Street slumped on Friday even after upbeat economic data provided a brighter recovery picture in the United States, as investors worried more budget-cutting measures may cause an economic slowdown in Europe.

As market closed, the Dow Jones industrial average tumbled 162. 79, or 1.51 percent, to 10,620.16. The Standard & Poor's 500 index dropped 21.75, or 1.88 percent, to 1,135.68 and the Nasdaq plummeted 47.51, or 1.98 percent, to 2,346.85.

Despite that, major indexes still registered weekly gains due to big rallies on Monday and Wednesday. Both the Dow and S&P gained more than 2 percent for the week, while the technology- heavy Nasdaq rose more than 3.5 percent.

Friday's plunge came mainly because investors worried new austerity measures in Greece, Spain and Portugal will slow the economic recovery in Europe, driving investors from equities to safe-haven assets such as gold and U.S. treasuries. Gold hit record highs near 1250 dollars an ounce on Friday as the euro was trading near its 19-month low against the U.S. dollar.

Such fears intensified in the market after Paul Volcker, former Federal Reserve Chairman, said he's concerned that the euro area may break up after the Greek fiscal crisis that sparked an unprecedented bailout by the region's members.

The Chicago Board Options Exchange Volatility Index, known as the VIX, rose 4.77 points to 31.45.

Economic data released on Friday continued to show U.S. economic recovery was well on track, but it failed to offer any boost to the market.

The Commerce Department said before the opening bell that U.S. retail sales rose for the seventh straight month. The 0.4 percent jump in April is better than economists had expected, but it was offset by disappointing earnings and outlook from some major retailers. Consumer spending is always closely watched by the market as it accounts for about 70 percent of economic activity.

April industrial production data also came in stronger than expected, more evidence that manufacturing is playing a leading role in powering the economic recovery.

Meanwhile, the University of Michigan said consumer sentiment edged higher to 73.3 in May, basically in line with market anticipation.

Source: Xinhua


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