Indexes fell on currency and economic worries, with the S&P 500 logging its worst week in four years. In focus next week: February's jobs report
Stocks finished lower Friday, as a soft consumer sentiment report added to concerns about the global economy at the end of a turbulent week for world markets. Traders were looking ahead to reports next week on factory orders and nonfarm payrolls for further economic clues, says Standard & Poor's Equity Research.
On Friday, the Dow Jones industrial average was lower by 120.24 points, or 0.98%, to 12,114.1, more than 600 points below its record high set Feb. 20. The broader Standard & Poor's 500 index shed 16 points, or 1.14%, to 1,387.17, for its worst week since January, 2003. The tech-heavy Nasdaq composite dropped 36.21 points, or 1.51%, to 2,368.
NYSE breadth was negative, with 25 issues declining for every 8 advancing. Nasdaq breadth was 22-8 negative.
The value of the yen climbed against the dollar Friday. Global traders may have been unwinding yen "carry trade" positions due to worries about the U.S. and Chinese economies, says S&P. Carry trades are where investors borrow money from a low-interest-rate country like Japan and invest it in a country where interest rates are substantially higher.
In economic news, the University of Michigan's final February consumer sentiment reading dropped to 91.3, weaker than expected, from 93.3 earlier in the month. However, "upward trending gasoline prices may have depressed the late-month readings," says Action Economics.
Meanwhile, St. Louis Federal Reserve President William Poole countered some recent economic fears, which were sparked partly by former Fed chief Alan Greenspan's recent comments on a possible recession. "We do not see a recession coming," Poole said.
Another busy schedule of economic data could move the markets next week. Releases on the docket include data on employment, non-manufacturing business activity, and January international trade, along with the Fed's Beige Book report.
Among Friday's stocks in the news, Dell (DELL) was higher after the computer maker reported a 33% drop in fourth-quarter earnings to mixed analyst response.
Novell (NOVL) was lower after the networking software maker said it swung to a loss in the fourth quarter.
Gap (GPS) was also down, as the clothing retailer missed analyst estimates with a 35% slide in fourth-quarter profit.
On the upside, Dow component American International Group (AIG) was higher after the insurer posted sharply higher fourth-quarter net income and announced an $8 billion stock buyback program.
Shares of Dean Foods (DF) gained after the food processor and distributor announced it will pay a a dividend of about $15 a share, or about $2 billion.
Discount retailer Kohl's (KSS) was higher on a 29% jump in fourth-quarter profit.
Elsewhere, Nasdaq (NDAQ) was lower after J.P. Morgan downgraded the exchange operator from overweight to neutral.
Boeing (BA) was modestly lower even after UPS (UPS) said it would cancel its order for 10 aircraft from rival airplane maker Airbus.
On the M&A front, Ford (F) said it will sell subsidiary Automobile Protection to private equity fund Trident IV LP, which is managed by Greenwich (Conn.)-based Stone Point Capital.
In the energy markets, April West Texas Intermediate crude oil futures fell 36 cents to $61.64 a barrel.
European markets finished mostly lower. The FTSE-100 index in London edged up 0.2 points, or less than 0.01%, to 6,116.2. Germany's DAX index dropped 36.92 points, or 0.56%, to 6,603.32. In Paris, the CAC 40 index was down 33.7 points, or 0.62%, to 5,424.7.
Asian markets ended mixed. In Japan, the Nikkei 225 index skidded 236.58 points, or 1.35%, to 17,217.93. In Hong Kong, the Hang Seng index gained 95.41 points, or 0.49%, to 19,442.01. Korea's Kospi index slipped 2.87 points, or 0.2%, to 1,414.47.
Treasury yields eased following the damp consumer sentiment data. The 10-year note rose in price 08/32 to 100-29/32 for a yield of 4.51%, while 30-year bonds climbed 11/32 to 101-19/32 for a yield of 4.65%.