S&P 500 Caps Worst Week Since 2012 as Crises Offset Data
By Joseph Ciolli and Jacob Barach Aug 1, 2014 1:43 PM PT
Aug. 1 (Bloomberg) — Michael Spence, professor at NYU Stern School of Business, and Josh Rosner, managing director at Graham Fisher and Company, discuss yesterday’s market selloff and the global risks that brought us to this point. They speak on “Bloomberg Surveillance.”
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The Standard & Poor’s 500 Index fell for a second day, giving it the biggest weekly drop in two years, as concern over Argentina and Portugal overshadowed data that signaled the Federal Reserve may have leeway to keep rates low.
JPMorgan Chase & Co. and Morgan Stanley slumped more than 2.1 percent as a committee ruled that Argentina’s default will trigger $1 billion of credit-default swaps. LinkedIn Corp. (LNKD) jumped 12 percent after projecting revenue that beat forecasts. Procter & Gamble Co. increased 3 percent as profit topped estimates amid cost reductions.
The S&P 500 fell 0.3 percent to 1,925.15 at 4 p.m. in New York, bringing its weekly loss to 2.7 percent, the worst since June 2012. The Dow Jones Industrial Average declined 69.93 points, or 0.4 percent, to 16,493.37, after erasing its gains for the year yesterday. About 7.3 billion shares changed hands on U.S. exchanges today, 27 percent above the three-month average.
“Whether it’s the Portuguese bank, Argentina or continued unrest in the Middle East, these things are seemingly mattering more to investors now,” Matt McCormick, who helps oversee $11 billion as a fund manager at Cincinnati-based Bahl & Gaynor Inc., said in a phone interview. “All of a sudden, geopolitical things that didn’t matter a few weeks ago are starting to be more relevant concerns, and they’re serving as catalysts to sell. Investors are getting more risk-averse.”
U.S. stocks joined a global selloff yesterday, sending the S&P 500 to its first monthly decline since January, after companies from Exxon Mobil Corp. to Samsung Electronics Co. reported results that disappointed investors, Argentina defaulted and Banco Espirito Santo SA was ordered to raise capital.