Stockmarkets will start a nervy week thanks to Friday night’s shock Securities and Exchange Commission civil fraud charges against Goldman Sachs.
The news took Wall Street by complete surprise and crunched markets, from shares to commodities, bonds and derivatives.
Gold, oil, sugar, copper and other commodities fell, the US dollar rose as did the price of US bonds as some investors scampered into a safe heaven.
The shock hit the US market hard after almost two months of steady rises.
Europe was also whacked by the news and ended much weaker.
Our market was weak Friday, but finished up for a 10th week.
The futures market has marked in a 43 point fall for the ASX 200 at the opening this morning.
In the US, two of the three major indexes eked out their seventh consecutive week of gains.
The Dow fell 125.91 points, or 1.1%, to 11,018.66, leaving it with a weekly gain of 0.2%.
The S&P 500 Index fell 19.54 points, or 1.6%, to 1,192.13, leaving it down 0.2% over the week.
The Nasdaq Composite Index shed 34.43 points, or 1.4%, to 2,481.26, but up 1.1% for the week.
Friday’s fall on Wall Street was the US market’s biggest in nearly two months, taking the shine off a six-day winning streak.
Not helping sentiment was the spate of follow-up stories pointing out other problems in the same area of synthetic collaterised debt obligations involving other banks and clients which have been ticking along under the radar.
European shares were hit in late trading as the news broke in the morning in New York on Friday.
The FTSE Euro index was also off around 1.5%, thanks to the Goldman news, but the Stoxx 600 index fell 0.7% over the week to end its big rise.
Markets fell last week in 12 of the 18 main western European economies.
The Goldman charges added to the pressures from the woes about Greece’s financial position.
Talks are due to be held this week in Athens between the Greek government, the IMF and the European Commission and European Central bank on how to use the 30 billion euro support package for the country.
Officials will have to catch trains, buses or drive, with air travel across Europe virtually halted by the clouds of volcanic ash.
Or it will have to be done by tele conference.
Germany’s DAX fell 1.1% and France’s CAC 40 retreated 1.6%. London’s FTSE 100 fell 0.5%. Greece’s market added 0.2% after two weeks of losses.
Shares fell, with the ASX200 index slipping back below the 5000-point mark, but the market still managed to chalk up a gain of 0.7% for the tenth consecutive week of rises.
At the close, the benchmark ASX200 index was down 17.2 points, or 0.3%, at 4984.7 and the All Ordinaries index fell 16.8 points, or 0.3%, to 5007.3.
Asian markets also fell Friday.
Chinese shares fell after the government on Thursday introduced tougher measures, including raising the down payment for second-home buyers to a minimum of 50% from the previous 40%, to curb property speculation and rein in prices.
Japan’s Nikkei dropped 1.5% to 11,102.18, Australia’s S&P/ASX 200 fell 0.3%, South Korea’s Kospi shed 0.5%, Hong Kong’s Hang Seng Index lost 1.3%, Taiwan’s Taiex slid 0.7% and China’s Shanghai Composite lost 1.1%.
In commodities New York WTI oil fell $US2.40, or 2.8%, to $US83.11 a barrel.
June gold futures in New York fell $US23.40 to settle at $US1,136.90 an ounce on Comex.
Gold’s losses on Friday, pushed futures down 2.5% for the week after surging Monday to a new four-month high.
Other metals followed gold down Friday.
Silver for May delivery lost 76 cents, or 4.1%, to settle at $US17.67 an ounce.
Platinum and palladium were all weaker as well.
Comex July copper lost 8.55 cents, or 2.4%, to $US3.5355 a pound, the biggest fall for seven weeks.
Friday’s fall pushed the metal into the red for the week for a 1.5% drop.
July raw sugar dropped 0.9%, or more than 5%, to 16.18 US cents a pound in New York.
Friday’s fall also pushed sugar into the red for the week with a loss of 3.5%.
The Reuters/Jefferies CRB Index (CRB) dropped 3.46% to 276.29.
