Worries about bank regulation, the global economy, US economic growth and BP saw markets finish mostly lower on Friday.
That ended a week where losses dominated.
The Dow closed down 9 points, or 0.1%, to 10,143.8. It was down 2.94% over the week.
Nasdaq lost 6 points, or 0.27% to 2,233.48, and shed 3.74% for the week.
And the Standard & Poor’s 500 index added 03% to 1,076.76, but was off 3.65%.
All were sharp and significant losses for a week when the concerns about the future direction of the US economy came to the fore.
In contrast US government debt gained, with the price of 10 year bond rising the most in a month after the Fed sat on rates and downgraded its view of the immediate outlook for the US economy to a weaker level.
Bloomberg said that auctions of two- and seven-year bonds last week produced higher-than-forecast demand.
The yield on the 10-year note fell this week 11 basis points, or 0.11%, to 3.11%.
That was the biggest fall since the five trading days ended May 21, when the yield fell 22 basis points (or 0.22%).
Yields on two year bonds fell 0.06% to 0.66% and touched 0.63% on Friday, closer to the all-time low of 0.6044% hit in December 2008, in the darkest days of the post Lehman Brothers collapse.
Bloomberg said that US government debt is up 5% so far this year, according to Bank of America Merrill Lynch.
That was the best performance for US bonds to this point in a year since 1995.
By way of contrast, the S&P 500 index is down 3.44% for 2010 (as of June 24).
All that fall and a touch more came from last week’s weakness.
US banks had a rally on Friday after the preliminary finalisation of the new financial regulation bill wasn’t as harsh as first though.
But some of the measures will be tough, and there are billions of dollars in new taxes to pay now and into the future, as well as some significant changes to banking practice.
A final bill is expected to emerge from both houses of the US Congress later this week.
But US bank failures continue with three small local lenders falling over and closing Friday.
That brought the tally of total US bank failures so far this year to 86 (and for the first six months of this year).
Banks in Florida, New Mexico and Georgia were shut.
Last year, 140 banks closed, compared with 25 in 2008 and three in 2007.
A total of 251 US banks have failed since the start of 2007, including the biggest of all Washington Mutual.
The main regulator, the Federal Deposit Insurance Corp, said it expects failures will peak in the third quarter, but is now warning that economic threats could cloud recovery for the banking sector.
There were 775 banks on the FDIC’s confidential "problem" list at the end of March.
The closure in Florida was the 14th in the state this year, but is the same number as for all of 2009 (28 in 18 months).
That makes Florida one of the black holes of US property and banking failures.
But Georgia still tops the list and Friday’s shutdown was the 9th this year so far and 39th since 2008.
European markets slipped on Friday and last week.
London’s FTSE 100 lost 1%, Germany’s DAX 0.7% and France’s CAC 40 fell 1%.
The Stoxx Europe 600 Index fell 2.8% last week, the first drop in four weeks.
It’s now down 8.87% from its high in April.
In Asia markets were also easier.
Japan’s Nikkei fell 1.9%, Hong Kong’s Hang Seng fell 0.2% and China’s Shanghai Composite lost 0.5%.
Shanghai was up 1.6% and Hong Kong 2% after the Chinese government freed up the Yuan.
The MSCI Asia Pacific Index fell half a per cent last week and is now down 4% this year.
Australian shares fell to a two-week and had their first weekly fall in three.
The ASX200 index fell 66.7 points, or 1.5%, to 4413, bringing the week’s losses to 3.2%
The broader All Ordinaries index lost 64.7 points, or 1.4%, to 4439.4.
In round terms the Australian market is heading for a fall of around 8% in the June half year, after being up around 22% in the December half year.
The June quarter should see a fall of around 9% by Wednesday, assuming no major moves either way.
And the Yuan had its biggest rise since December 2008 in its first week of trading with a new flexible peg.
It finished up around 0.48% after the central bank set the central reference rate at 6.7896 to the US dollar on Friday, up 0.30% from the Thursday fix.
