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S&P 500 Posts First Back-to-Back Weekly Drop for 2012

U.S. stocks fell, sending the Standard & Poor’s 500 to its first back-to-back weekly decline since November, after employers added fewer jobs than estimated and investor concern over global economic growth intensified.

All 10 groups in the S&P 500 also slipped after China’s gross domestic product slowed more than forecast. Financial shares fell the most, sinking 2.8 percent, as Bank of America Corp. (BAC) tumbled 6 percent. Apple Inc. (AAPL), the world’s largest company by market value, sank 4.5 percent for the biggest weekly loss since October. Alcoa Inc. (AA), the first company in the Dow Jones Industrial Average to disclose quarterly results, rose 2.3 percent after posting an unexpected profit.

The S&P 500 dropped 2 percent to 1,370.26, its worst week since Dec. 16. The decline came even as the benchmark index for American equities had its best two-day gain of the year on April 11 and 12, sparked by optimism about earnings and signals from the Federal Reserve that interest rates will remain low. The Dow lost 210.55 points, or 1.6 percent, to 12,849.59.

“There are still macro concerns that are weighing on the market right now,” Joseph Veranth, chief investment officer at Dana Investment Advisors in Brookfield, Wisconsin, said in a telephone interview. The firm manages $3.4 billion. In the U.S., “economic numbers haven’t gone off a cliff, but the key is they are a little weaker than people expected,” he said. China and Europe “are concerns for us as part of the overall puzzle.”

Jobs Report

Equities fell as U.S. employers added 120,000 jobs in March, less than the median economist forecast of 205,000 in a Bloomberg survey. Consumer confidence dropped and more Americans than forecast filed claims for jobless benefits. A surge in Spanish and Italian bond yields fueled concern Europe’s debt crisis is worsening, while China said its economy expanded 8.1 percent in the first quarter, the slowest pace since 2009.

The S&P 500 has slumped 2.7 percent in April, poised for the biggest monthly loss since September. The index finished the previous three months with a 12 percent gain, producing the best first-quarter rally since 1998.

The benchmark gauge jumped 0.7 percent on April 11 following Alcoa’s results, and added 1.4 percent April 12 as Fed Vice Chairman Janet Yellen and New York Fed President William C. Dudley endorsed the central bank’s view that borrowing costs are likely to stay low through 2014. Stocks retreated 1.3 percent on the final day of the week as the cost of insuring against a Spanish default rose to a record.

The Chicago Board Options Exchange Volatility Index (VIX), which measures the cost of using options as insurance against declines in the S&P 500, jumped 17 percent to 19.55. The gauge, known as VIX, rose for a fourth week, the longest streak since August. It reached 14.26 in March, the lowest level since 2007.

Financials Tumble

Concern about the global economy drove financial shares lower even as JPMorgan Chase & Co. (JPM) and Wells Fargo & Co. (WFC) reported earnings that beat estimates. Bank of America tumbled 6 percent to $8.68 for the biggest decline in the Dow. JPMorgan lost 2.6 percent to $43.21, while Wells Fargo dropped 2.6 percent to $32.84.

Alcoa rose 2.3 percent to $9.85. The largest U.S. aluminum producer reported a first-quarter profit after customers from automakers to beverage-can manufacturers ordered more of the metal and the company closed higher-cost smelting capacity.

Ninety-one companies in the S&P 500 are scheduled to announce results next week. They include Citigroup Inc., Goldman Sachs Group Inc., Bank of America and some of the largest technology companies such as International Business Machines Corp., Intel Corp. and Microsoft Corp.

Slowing Earnings

S&P 500 per-share profit growth slowed to 1.7 percent during the first three months of the year from 4.9 percent in the fourth quarter, according to analyst estimates compiled by Bloomberg. “Expectations for earnings have really come down significantly over the last three to six months,” Veranth said. “It might have been overdone.”

Chesapeake Energy Corp. (CHK) plunged 9.9 percent to $19.95, leading energy companies to a 2.7 percent retreat. The second- largest U.S. natural-gas producer announced $2.6 billion in asset sales that will cut debt and fund drilling after slumping gas prices eroded cash flow.

The S&P 500 Information Technology Index (S5INFT) fell 2 percent, dropping for the first time this year and ending its longest string of weekly gains since at least 1989. Apple sank 4.5 percent to $605.23. After rising to a record on April 9, the shares fell four days in a row for the longest losing streak since December.

Hewlett-Packard Co. (HPQ) advanced 6.3 percent to $24.57. Gartner Inc. said the global personal-computer industry unexpectedly grew in the first quarter and the Palo Alto, California-based company remained a market leader.

Supervalu Inc. (SVU) rose 25 percent, the most in the S&P 500, to $6.41. The supermarket and pharmacy chain forecast 2013 earnings excluding some items of at least $1.27 a share, beating the average analyst forecast of $1.19.

To contact the reporter on this story: Lu Wang in New York at lwang8@bloomberg.net

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

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