Trading for May in the US finished on Friday, with the Memorial Day long weekend closing American markets tonight, our time.
Markets are also closed in London tonight where there’s a sudden instability in the new coalition government with the number two Treasury minister forced to resign yesterday over an expenses scandal.
That means the performance figures for May for shares, bonds and commodities are in, and they make unpleasant reading.
Trading elsewhere continues today and tonight.
After Friday’s late fall on Wall Street in light volumes (people went away early), there won’t be too many people wanting to buy and stay long with so much volatility about.
Wall Street had its worst May in 70 years, a reminder of just how fraught the month was.
A downgrade of Spain’s credit rating by a second agency late Friday (Fitch, after Standard & Poor’s earlier in the month) underlined the fragility of confidence and the still high risk fears in the markets.
Fitch cut Spain’s long-term foreign-and local-currency issuer default ratings to AA-plus from AAA, and put the outlook on the new ratings at stable.
In the US, the Dow lost 122 points, or 1.2%; the S&P 500 index fell 14 points, or 1.3%; and the Nasdaq dropped 21 points, or 0.9%.
For May, the Dow lost 7.9%, its worst month since February 2009, when it fell 11.7%, and worst May since 1940, when it plunged 21.7%.
The Nasdaq lost 8.3%, its worst month since November 2008, when it dropped 10.8%, and its worst May since 2000, when it lost 11.9% in the tech and net wreck.
The S&P 500 lost 8.2%, its worst month since February 2009, when it shed 11%, and its worst May since 1962, when the drop was 8.6%.
For the week, the Dow closed down 0.6%, the S&P 500 rose just 0.2% and the Nasdaq added 1.3%.
Bond yields, the indicator of the rush for safety as the month went on, ended at 3.30%, down from the high of 3.66% and up from the low of 3.06% last week.
The Fitch downgrade of Spain came in the afternoon, New York Time, knocked shares lower and commodities off their tops and saw a small surge into bonds.
Friday’s fall came after Thursday’s rally continued into early trading.
The Dow jumped 285 points, or almost 3%, and the S&P 500 and Nasdaq both gained more than 3% on Thursday.
After such a strong rise, investors looked at the long weekend and went on holiday early, but got caught by the Fitch announcement.
European shares closed lower on Friday, but were higher over the week.
The Stoxx Europe 600 Index ended up almost 3% over the week.
But that left it down 6.1% for May so far and 10% for 2010.
Sixteen of Europe’s 18 major markets rose over the week, with the FTSE 100 up 2.5% in London, Germany’s DAX with a 2% gain and France’s CAC 2.5% higher as well.
London is closed tonight, and London lost 6.6% for the month up to Friday’s close.
But falls in other European markets will be larger when the books are ruled off tonight.
Asian markets ended higher on the day with Japan’s Nikkei up 1.3%, Hong Kong’s Hang Seng 1.7%, China’s Shanghai Composite 1.1% and Australia up 1.8%.
The MSCI Asia Pacific Index rose 1.3% last week, with solid gains in some markets, such as Australia where the market was up 3.5%.
Shanghai rose 2.8%, Hong Kong gained 1.1%; the Nikkei was up 0.2%, and South Korea’s Kospi Index rose 1.4%.
The MSCI Asia Pacific Index is down 12% from the peak in April.
In Australia shares rose strongly on Friday to complete a good week.
But they will open weaker today after Wall Street’s late fall Saturday morning with the future market indicating a fall of 42 points, or 1%.
At Friday’s close the ASX200 index was up 78.3 points, or 1.8%, at 4457.5, while the All Ordinaries index gained 79.9 points, or 1.8%, to 4479.
The week’s gain of 3.5% halved the 6.6% drop the week before.
The Australian market is down 8.5% for the year so far.
