U.S. stocks fell last week, including the biggest one-day drop in a month, amid concern the debt crisis in Europe is spreading and as American lawmakers failed to agree on cutting the deficit.
The Standard & Poor’s 500-stock index pared the weekly slump Friday as energy and technology companies rallied. Alcoa Inc., the largest U.S. aluminum producer, lost 5.5 percent for the week after reporting second-quarter profit that missed analysts’ estimates. Bank of America Corp. dropped 6.5 percent, the most in the Dow Jones industrial average, as financial companies tumbled. Google s urged 12 percent, the most since April 2008, after beating sales projections.
The S&P 500 dropped 2.1 percent to 1,316.14 for the week, the most since the period that ended June 10. The index retreated after posting the biggest two-week increase since 2009. The Dow fell 177.47 points, or 1.4 percent, to 12,479.73. “The market reaction is completely appropriate considering the uncertainty that we have in the world,” said Michael Yoshikami, chief executive of YCMN et Advisors. His firm manages $1.1 billion. “Investors feel anxious, and when investors feel anxious they either sell or sit out,” he said.
U.S. equities dropped as the impasse between President Barack Obama and Republicans in Congress prompted Moody’s Investors Service and S&P to say they may cut the federal government’s top credit rating. The S&P 500 had risen to within 10.39 points of the almost three-year high reached on April 29.
The Treasury will sell $27 billion in three-month bills and $24 billion in six-month bills on Monday. They yielded 0.01 percent and 0.055 percent in when-issued trading.