Stocks: Worst Thanksgiving-Week Drop Since ’32

U.S. stocks fell, capping the worst Thanksgiving-week drop since 1932 in the Standard & Poor’s 500 Index, as S&P cut Belgium’s rating and a report said Greece is demanding private investors accept larger losses on their debt.

Financial (S5FINL) stocks in the S&P 500 rose 0.4 percent as a group, trimming an earlier gain of 2 percent. Chevron Corp. and Hewlett-Packard (HPQ) Co. slid at least 1.5 percent to pace losses in the Dow Jones Industrial Average. Sears Holdings Corp. lost 1.3 percent while Wal-Mart Stores Inc. (WMT) rose 0.4 percent on Black Friday, traditionally the biggest U.S. shopping day of the year.

The S&P 500 declined 0.3 percent to 1,158.67 at 1 p.m. New York time, falling for a seventh straight day, the longest streak since August. The Dow retreated 25.77 points, or 0.2 percent, to 11,231.78. The U.S. stock market was closed yesterday for a holiday and trading ended at 1 p.m. today. About 3 billion shares changed hands on U.S. exchanges, the lowest volume since Nov. 26, the day after Thanksgiving last year.

“The demands of Greece now totally change the game,” Mark Grant, a managing director at Southwest Securities Inc. in Fort Lauderdale, Florida, said in an e-mail. “The situation can no longer be called voluntary by any stretch of the imagination. The equity markets in the United States may test the lows again as there is increasing concern of a major recession in Europe.”

The S&P 500 fell 4.7 percent since Nov. 18, capping a second week (SPX) of losses, as the burden of government debt grew around the world. The cost of insuring European sovereign bonds against default rose to a record. The benchmark gauge was headed toward its worst November since 2000, dropping 7.6 percent for the month so far.

Stocks Reverse Gains

Stocks reversed gains today as Reuters reported that Greece is demanding that new bonds issued to investors as part of a debt swap have a net present value of 25 percent, lower than the “high 40s the banks have in mind.” Belgium’s credit rating was cut one step to AA by S&P, which said bank guarantees, political instability and slowing economic growth will make it difficult to reduce the nation’s debt load.

Banks had the biggest gain in the S&P 500 among 24 industries, rising 1 percent. Wells Fargo & Co. jumped 1.3 percent to $23.51. BB&T Corp. rose 0.6 percent to $21.17.

“It’s nice to see some better performance in financials,” Kevin Caron, a market strategist in Florham Park, New Jersey, at Stifel Nicolaus & Co., said in a telephone interview. His firm has about $108 billion in client assets. “Still, you need several days like this to make a compelling case for momentum in the financial sector.”

Jefferies Rallies

Jefferies Group Inc. (JEF) gained 1.3 percent to $10.65. The investment bank has hired at least seven UBS AG bankers in Hong Kong in the past two months after luring Ren Wang from the Swiss lender to become its Asia president, three people with knowledge of the matter said.

Some of the biggest American companies fell today. Chevron retreated 1.6 percent to $92.29. Hewlett-Packard declined 1.5 percent to $25.39.

A measure of retailers in the S&P 500 fell 0.8 percent, the second-biggest decline among 24 industries. Sears Holdings slid 1.3 percent to $58.40. Wal-Mart rose 0.4 percent to $56.89. Amazon.com Inc. (AMZN), the biggest Internet retailer, slumped 3.5 percent to $182.40.

Black Friday arrived with consumer sentiment at levels previously reached during recessions, as a record share of households said this is a bad time to spend, according to the Bloomberg Consumer Comfort Index. The measure has reached minus 50 or less in nine of the past 10 weeks, an unprecedented performance in its 26-year history.

To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

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