Sept. 10, 2011, 11:49 a.m. EDT
U.S. stocks: Roller-coaster ride will continue
After down week, Wall Street may not get any relief from volatility
By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) — U.S. stocks in the coming week likely will face more of the European-driven volatility that’s bounced the Dow Jones Industrial Average on a series of triple-digit swings over the past six sessions.
“Europe is the dominant story that continues to be behind the volatility; there is not a clear path to recovery there that has led to making the market nervous,” said Brad Sorensen, director of market and sector analysis at Charles Schwab.
On Friday, Wall Street’s nerves were further frayed as worries intensified about Greece’s debt crisis after the European Central Bank said its top economist Juergen Stark had resigned from its executive board, and Bloomberg News reported the German government was readying contingency plans to safeguard its banks in the event of a Greek default.
The Dow Jones Industrial Average fell 303.68 points, or 2.7%, to 10,992.13, leaving it with a weekly drop or 2.2%.
The Standard & Poor’s 500 declined 31.67 points, or 2.7%, to 1,154.23, off 1.7% from the prior Friday’s finish.
Down 0.5% for the week, the Nasdaq Composite Index shed 61.15 points, or 2.4%, to 2,467.99.
As nervous investors fled equities for perceived safer havens, U.S. Treasury yields dropped to historic lows, with the benchmark 10-year yield declining to 1.8976%, the lowest on record in Fed data going back to 1953. The U.S. dollar hit a six-month high against the euro, which dropped to a low of $1.3697 as investors worried about the euro bloc’s economy at large.
Silver lining?
Given the negative sentiment, it doesn’t take much in the way of good news to push the market higher, and even modestly positive events can have an impact, said Sorensen, pointing to Wall Street’s rise Wednesday after a German court cleared the nation’s participation in the euro bloc’s rescue fund.
Domestically, U.S. economic data in the coming week is expected to show weak but continued growth, and given the dearth of corporate results “one-off events will drive the market over the next week or two,” said Sorensen.
Full story: http://www.marketwatch.com/story/us-stock-market-were-all-europeans-now-2011-09-10?link=MW_home_latest_news
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