US sharemarkets finished the week with barely a spark as economic data gave little reason to reverse the downturn in sentiment triggered by the Fed’s cutting of its economic outlook and several poor data announcements in the three days afterwards.
Adding to the pressure and feeling of disappointment was the low volume of trading: even though automated trading systems dominate (and their high level of trading) trading volumes, Friday saw 5.98 billion shares traded on the New York Stock Exchange, against more than the and 9.65 billion daily average in 2009.
Major indexes posted their fourth day of losses.
For the week, the Dow fell 3.3%, while the S&P slid 3.8% and the Nasdaq lost 5%.
The Dow fell 16.80 points, or 0.16%, to 10,303.15 on Friday; the Standard & Poor’s 500 Index dropped 4.36 points, or 0.40%, to 1,079.25. The Nasdaq Composite Index dropped 16.79 points, or 0.77%, to 2,173.48.
Tech stocks, along with consumer-discretionary shares, were the worst-performing sectors on Friday after J.C. Penney shed 4.7% on a profit forecast downgrade, despite making a second quarter profit.
Nordstrom and Urban Outfitters, two other retailers, also issued very cautious outlooks, while on Thursday, Kohls, another department store chain, cut its forecast.
Retailers will again be the focus this week, with the likes of Wal-Mart Stores, Gap Inc and Target Corp reporting quarterly results.
Traders say even though it is summer and volumes are usually lower, the drop in activity has been clear for months now as billions of dollars is withdrawn from equity (mutual) funds and invested in bonds and bond funds.
The high speed automated trading systems of many big brokers and investors shouldn’t really be taking a summer holiday, and yet there’s a feeling that even their trading levels are down.
European shares rose on Friday, but finished lower for the week as investors continued to worry about the strength of the economic recovery.
They were more influenced by the solid growth from Germany and for the eurozone and ignored the weak levels of activity in Portugal, Spain, Italy and Greece.
But Friday’s gains were not enough to offset falls in earlier trading.
The Stoxx 600 index fell 1.2% last week. The week before it was up 1.3%.
The index is 6.1% below this year’s high on April 15.
Markets fell in 17 of the 18 western European countries except Iceland.
Germany’s DAX fell 2.4%, London’s FTSE 100 dropped 1.1% and France’s CAC 40 slumped 2.8%.
In Asia, the MSCI Asia Pacific Index fell 3.7% for the first decline since the week to July 2.
The index is down around 8.6% from the peak on April 15.
Japan’s Nikkei 225 shed 4% last week, thanks to fears about the impact of the stronger yen on corporate profits and exports.
Australia’s ASX 200 Index slid 2.3%, Hong Kong’s Hang Seng Index lost 2.8%, and China’s Shanghai Composite Index lost 1.9%.
Chinese government data during the week showed the country’s industrial production, retail sales and import growth slowed.
That’s the big story for the region.
