Dow falls to six-year low as confidence in US banks ebbs
US stocks fell for a second week, sending the main Dow Jones index to its lowest level in six years, as economic reports confirmed fears the global recession was deepening.
Shares face another choppy week as the debate about whether to nationalise banks intensifies along with growing investor demand to rid the financial system of its toxic assets.
Citigroup and Bank of America tumbled more than 31%, pushing financial shares in the S&P 500 to the lowest level since 1994.
Agribusiness stocks Deere and Caterpillar led industrials to the steepest declines after a record contraction in New York manufacturing.
The Dow fell 100 points on Friday for a weekly loss of 484.74 points, or 6.2%, to 7365.67. The S&P 500 fell 6.9% to 770.05, extending its worst start to a year to 15%.
Canadian stocks fell, sending the main index to its lowest level in three months. The Standard & Poor’s/TSX Composite Index fell 2.9% to 7949.99, the lowest close since November 10 when it fell to a five-year low.
The main Canadian stock benchmark lost 8.4% for its worst weekly drop since December 5.
European stocks posted their biggest weekly drop in two months, sending the Dow Jones Stoxx 600 to the lowest level since March 2003. The Stoxx 600 dropped 7.5% over the week to 176.93 as all 19 industry groups retreated except food and beverage companies. The gauge is down 11% this year.
National benchmark indexes fell in all of the 18 western European markets.
UK stocks declined, driving the FTSE 100 Index below 4000 for the first time in three months. On Friday it fell 129.31, or 3.2%, to 3889.06, the lowest level since November 21. The benchmark retreated 7.2% over the week.
In Germany, the benchmark DAX fell to its lowest level in more than four years. On Friday, it fell 4.8% to 4014.66, the lowest since November 1, 2004, and extending its weekly drop to 9%.
France’s CAC 40 Index dropped 122.05, or 4.3%, to 2750.55, its lowest since April 2003. The weekly loss was 8.3%.
Commodities: Gold tops $US1000/oz
Crude oil fell below $US39 a barrel, retreating from its largest gain in seven weeks.
March delivery prices fell 54USc, or 1.4%, to settle at $US38.94 in New York. The futures rose 3.8% this week, the first weekly gain in the past four. Prices are down 13% this year.
The more-active April contract fell 15USc, or 0.4%, to $US40.03 a barrel.
Gold surpassed $US1000 an ounce in New York for the first time in almost a year as investors, hurt by plunging stocks and a deepening recession, sought to protect their wealth.
Gold futures for April delivery rose $US25.70, or 2.6%, to $us1002.20 an ounce in New York. Earlier the price touched $US1007.70, the highest since March 18.
Currencies: Euro, yen down
The euro reached the lowest level against the dollar in three months on speculation financial turmoil in eastern Europe may deepen the recession in the 16 nations that use the currency.
The yen fell for a fourth week against the dollar and dropped versus the euro as the biggest contraction in Japan’s economy since the 1974 oil shock eroded demand for the currency as a haven from the global recession.
The euro fell 0.3% this week to $US1.2826. The currency touched $US1.2513 on February 18, the lowest level since November 21, and lost 8.2% in 2009.
The yen declined 1.5% to ¥93.35 per dollar and lost 1.1% to ¥119.68 against the euro.