US stocks cap volatile week with sizable decline

The Federal Reserve is expected to hold its first scheduled meeting of the year, and the Labor Department will weigh in on the state of the job market.

By AP
January 27, 2008 09:17
3 minute read.
global economy 88

global economy 88. (photo credit: )

SHARES WALL STREET Stocks ended a tumultuous week with a sharp decline Friday, backtracking following two days of stunning gains as investors turned cautious and cashed in some of their winnings. The Dow Jones industrial average still managed to record its first weekly advance of 2008, even as it fell more than 170 points on the day. The week, which started with a 465-point drop in the Dow soon after the market opened Tuesday, showed that the stock market is still fractious but may be going through healthy process of trying to establish a bottom following weeks of sharp declines. US President George W. Bush is scheduled to deliver his State of the Union address Monday, the Federal Reserve is expected to hold its first regularly scheduled meeting of the year on Tuesday and Wednesday, and then the Labor Department will weigh in on the state of the job market on Friday. The Dow fell 171.44 Friday, or 1.38%, to 12,207.17. The Dow had been up more than 100 points in the early going. Broader stock indicators also fell. The Standard & Poor's 500 index fell 21.46, or 1.59%, to 1,330.61. The technology-heavy Nasdaq composite index fell 34.72, or 1.47%, to 2,326.20. Despite the huge moves seen during the week, stocks finished not far beyond where they began, with the Dow adding 108 points, or 0.89%. The S&P 500 ended the week up 0.41% and the Nasdaq lost 0.59%. EUROPE Stocks fell slightly amid ongoing speculation about potential problems in the banking sector. Dutch bank ING Groep declined to comment on rumors that it would warn on profits while Fortis, the subject of similar chat, wasn't immediately available for comment. The Dow Jones Stoxx 600 Index closed flat at 322.23. The index closed out an extremely volatile week that saw it chalking up both its biggest daily percentage loss since September 11, 2001, on Monday as well as its biggest daily gain in almost five years on Thursday. The UK's FTSE 100 Index slipped 0.1% to 5,869.00, while France's CAC-40 Index shed 0.8% to 4878.12. Germany's DAX Index lost 0.1% to 6816.74. ASIA Japan's benchmark stock index jumped more than 4% Friday as traders bought exporter issues on a stronger dollar following reports of a US economic stimulus plan. The benchmark Nikkei rose 536.38 points, or 4.10%, to close at 13,629.16 points on the Tokyo Stock Exchange. Japan's broader Topix index, which includes all shares on the Tokyo exchange's first section, rose 60.32 points, or 4.70%, to 1,344.77 points. Hong Kong's Hang Seng Index jumped 6.7% to 25,122.37 points. CURRENCY The dollar gained ground against the euro as world stock markets recovered somewhat from the week's volatility and investors wondered what action the Federal Reserve might take at its meeting next week. The 15-nation euro was worth $1.4673 in late New York trading, down from $1.4760 Thursday in New York and a peak earlier Friday of $1.4776. The dollar also rose, to 107.00 Japanese yen from 106.79. But the dollar fell against the pound, which rose to $1.9813 from $1.9745. In other New York trading, the dollar rose to 1.0974 Swiss francs from 1.0869 Swiss francs, but fell to 1.0059 Canadian dollars from 1.0079 Canadian dollars. COMMODITIES Gold and platinum prices reached new highs Friday after mine stoppages in South Africa led to buying on supply concerns. Several major mining companies, including AngloGold, Harmony and Gold Fields Ltd., suspended all but emergency operations at some of the world's largest mines because of a national electricity emergency. Other commodities joined the rally, with oil closing above $90 a barrel for the first time in a week. South Africa is second only to China in world gold production, and is the globe's top producer of platinum. Mining operations in the country were suspended Friday on fears that power interruptions would trap workers underground. Gold Fields said it halted all its South African operations, including in the world's largest gold mine, which produces 7,000 ounces per day. The government said there was no foreseeable end to the electricity shortages. An ounce of gold for February delivery spiked to $924.30, a fresh record, on the New York Mercantile Exchange before easing back to settle at $910.70, up $4.90. April platinum peaked at a new high of $1,694.90 an ounce. Prices later settled at $1,670, up $57. Light, sweet crude for March delivery rose $1.30 to settle at $90.71 on the New York Mercantile Exchange.


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