US stocks end brutal week

NEW YORK: It was a brutal week for US stock markets, as investors sold-off shares on signs that growth in the world's largest economy was slowing.

The Dow Jones Industrial Average sank 1.4 percent by Friday, posting a sixth straight week of losses for the first time since October, 2002.

The Nasdaq fell 2.9 percent and the S&P 500 fell two percent.

Most of the declines early in the week appeared to be a hangover from poor jobs data the week before, which showed unemployment rising to 9.1 percent.

"The markets are reacting to an economy shifting to a lower gear but also seeing influential indicators such as commodity prices and bond yields decline," said Sam Stovall of Standard and Poor's.

"It's causing investors to wonder if global economic growth will do even more than simply shift to lower gear, meaning it could be pointing to another recession."

That ill feeling was compounded on Tuesday when the Federal Reserve's Bernanke told an audience that the weak housing sector was holding back the recovery and that job creation was in a "far from normal" slump.

In his first public comments on the economy in nearly a month, he gave no hints that the Fed was ready to extend the $600 billion monetary stimulus program due to end this month.

Instead, he said, "accomodative monetary policies are still needed," apparently a reference to keeping interest rates at the current record-low level.

On Wednesday the news just got worse as ratings agency Fitch warned that the United States risks losing its top credit rating if it fails to raise its debt ceiling to avoid defaulting on loans.

The third of the three big ratings houses to issue such a warning, Fitch said the country needed to beat the August 2 deadline for upping its $14.29 trillion borrowing ceiling to avoid seeing its bonds lose their top-grade AAA rating.

It was a dire week for bank stocks, with the Bank of America losing 4.3 percent and Citigroup shedding 4.8 percent of its share value.

Energy stocks were lifted briefly after OPEC agreed to maintain output quotas at a Vienna meeting, sending global oil prices sharply higher, but most oil majors finished the week down.

The Dow ended the week down 172.45 points to 11,951.91. The Nasdaq fell 41.14 points to 2,643.73. The S&P fell to 1,270.98 points, down 18.02 points.

Copyright AFP (Agence France-Presse), 2011