Fears over unrest in Egypt sent world financial markets to the negative territory.
Thousands of anti-government protesters clashed with riot police to demand Egyptian president Hosni Mubarak to end their power. The Egyptian government responded to widespread street protests, deploying the military to quell the protests. Riot police used water cannons, fired tear gas to disperse crowds.
The Dow Jones Industrial Average closed down 1.39%, to 11823.70, the worst one-day drop since last August. The slump erased a weekly-gain it had coming into Friday’s session. The Dow fell 0.41% for the week after eight consecutive weeks of gains. Only two stocks, Procter & Gamble and DuPont, were flat. The rest of the Dow components fell.
The Standard & Poor’s 500 index declined 1.8 percent, to 1,276.34, its biggest one-day drop since August 11, 2010. All of its components fell. The index dropped 0.5 percent for the week.
The Nasdaq Composite Index tumbled 2.5 percent, to 2,686.89 and slipped 0.1 percent for the week.
Some corporate earnings reports disappointed investors. Ford Motor Co (NYSE: F) slipped 13 percent. The auto giant posted unexpected loss due to a loss in Europe and special charges related to debt-reduction measures, and rising costs in North America.
The Internet retailer Amazon.com Inc. (NASDAQ: AMZN) and Microsoft Corp (NASDAQ: MSFT) fell 7 percent and 4 percent respectively. Although the retailer’s sales in the fourth quarter surged 36%, they did not meet Wall Street’s expectation.
Shares of Chevron Corp. (NYSE: CVX) tumbled 1.5%. The oil company posted 72% surge in its earnings in the fourth quarter thanks to strong oil prices.
Shares of Apache Corp., the oil and gas explorer and producer, shed 1.3%.
The U.S. economy accelerated to 3.2 per cent in the fourth quarter, a rise from 2.6 per cent in the previous quarter. The 3.2 per cent figure raised hopes that the world’s No.1 economy is on self-sustaining path, marking the best showing since early 2009.
Accounting for about 70% of demand in the U.S. economy, consumer spending is the main drive to economy’s expansion in the last three months of 2010. Spending rose at a 4.4% annualized rate, the highest rate of increase since early 2006.
Prices of Treasury bonds and gold rose. Bonds are considered one of the safest assets.
