US stocks end lower for second day, S&P 500 sees biggest decline since 2012
02 Aug 2014
US stocks ended lower for a second day with the S&P 500 posting its biggest weekly decline since 2012 yesterday as concerns over Argentina's default continued to weigh on sentiment, dailyfinance.com reported.
Data showing US job growth slowed in July, while the unemployment rate unexpectedly rose pointed to the Federal Reserve running out of room to keep interest rates low for a while.
The jobs growth, which undershot economists' forecasts, came as a relief to some investors worried about how soon the Fed hiked interest rates after data on Thursday showed US labour costs recorded their biggest gain in over five and a half years during, the second quarter.
However concerns continued over Argentina's debt problems following the country's default earlier this week.
A US judge yesterday slammed Argentina's decision to default and ordered negotiations between the country and holdout investors to continue.
According to Natalie Turnow, chief investment officer of equities at Calvert Investment Management in Bethesda, Maryland, anytime a country defaulted on its debt, it was usually an unnerving event in the market. She added, the risk-aversion people sold risky assets.
However, she added the market dips should be seen as buying opportunities. She also said she did not think the end of the expansion cycle was near.
Friday's generally positive economic data kept pressure on the Federal Reserve to reduce its stimulus measures that had helped stock prices, according to Colin Cieszynski, chief market strategist at CMC Markets.
Cieszynski told MarketWatch that the good news for the economy was bad news for the market as it meant the government would have to take away the liquidity that had boosted stocks eventually.
The tech-heavy Nasdaq Composite was down 17.13 points, or 0.4 per cent, to close at 4,352.64, leaving it down 2.2 per cent for the week.
The small-cap Russell 2000 was down 5.21 points, or 0.5 per cent, to end at 1,114.86. The Russell, often viewed as a gauge of investors' risk appetite, ended 2.6 per cent down for the week and trading briefly as much as 8.8 per cent off its 1 July intraday high.
In Europe, Germany's DAX ended down 4.5 per cent for the week, in a loss that came as the biggest in two years, as investors continued to worry about the impact of sanctions against Russia.
Crude-oil futures retreated, while gold futures advanced.
