World Market Overview
U.S. stocks fell, spending Black Friday in the red as growing worries over the euro zone debt crisis overshadowed an encouraging start to the holiday shopping season. The Dow Jones Industrial Average dropped 95.28 points, or 0.85%, to 11092.00, putting it down 1% for the week. J.P. Morgan Chase was the measure's worst performer Friday with a 1.6% drop. DuPont was also weak, off 1.6%, and Bank of America fell 1.5%.
The Nasdaq Composite slipped 8.56, or 0.34%, to 2534.56 but managed to eke out a 0.7% gain for the week. The Standard & Poor's 500 index declined 8.95, or 0.75%, to 1189.40, and fell 0.9% for the week. The materials and energy sectors posted the biggest declines Friday as related commodities fell in a broad move away from risky assets.
The euro tumbled and the selloff in Spanish and Portuguese sovereign bonds continued even as Spanish Prime Minister Jose Luis Rodriguez Zapatero said there was absolutely no chance the euro zone's fourth largest economy would seek a bailout from the European Union.
The euro zone worries overshadowed strong signs on Black Friday sales in the U.S. Lines wrapped around stores and parking lots across the nation as shoppers sought early morning deals, especially on consumer electronics and toys. Still, retail shares were mixed. Wal-Mart Stores fell 0.5%, Home Depot declined 0.5% and TJX Cos. shed 0.3%, but GameStop climbed 0.7%, Macy's edged up 0.4% and Big Lots rose 0.3%.
European markets
European stocks fell Friday, with the Spanish market suffering particularly steep losses, as worries over sovereign debt contagion in the euro zone continued to escalate. The Stoxx Europe 600 index dropped 0.4% to 266.60, bringing weekly losses to 1.1%. Volume was thinner than usual as many traders stayed away from their desks, with U.S. markets returning for a shortened session after the Thanksgiving Day holiday.
Peripheral markets saw the heaviest selling pressure, though losses were pared somewhat by the close. The Spanish Ibex 35 index slumped 1.8% to 9,547.20, as banking shares weighed. Shares of BBVA fell 2.4% and Banco Santander declined 3.7%. The PSI 20 index in Lisbon fell 0.6% to 7,581.80. In Hungary, the BUX stock index declined 2.8% on escalating worries over the government's planned changes to the private pension-fund system.
Ireland's ISEQ stock index reversed earlier losses to gain 0.4%. Investors continued to worry about the possibility of contagion to Portugal and Spain following Ireland's decision to ask for aid from the European Union and the International Monetary Fund. The FTSE MIB index slipped 0.5% in Italian trading.
In a radio interview Friday, Spanish Prime Minister Jose Luis Rodriguez Zapatero dismissed the idea that Spain needs a rescue plan. Meanwhile, adding to the sour mood, reports of artillery fire near the South Korean island of Yeonpyeong served to rattle markets early on, and North Korea's official news agency reportedly said further escalation will lead to open war.
The French CAC 40 index fell 0.8% to 3,728.65, with BNP Paribas SA off 2.2% and Societe Generale SA down 1%. The German DAX 30 index lost 0.5% to 6,848.98, with shares of BMW AG down 1.1% and Deutsche Bank AG off 1.7%.
In London, losses for mining and bank shares dragged the FTSE 100 index down 0.5% to 5,668.70, weighed by shares of Vedanta Resources PLC, off 3.2%, and BHP Billiton PLC, off 1.6%.
Asian markets
Asian stocks ended mostly lower Friday, with shares in South Korea weighed down after the North issued a strongly worded warning and China's markets pressured by concerns of further tightening moves. South Korea's Kospi dropped 1.3%, Japan's Nikkei Stock Average shed 0.4%, Hong Kong's Hang Seng Index fell 0.8% and China's Shanghai Composite declined 0.9%.
Trading was muted, with U.S. markets closed Thursday for a holiday. Economists said investors were also pausing ahead of key economic data due out next week, including October industrial figures for Japan Tuesday, and a set of purchasing managers indexes for China Wednesday.
South Korean shares closed lower on heightened concerns over military tension in the Korean peninsula. Technology shares declined, in line with the overall index. Samsung Electronics fell 1.0% and Hynix Semiconductor lost 2.2%. Automakers and banks were weaker, with Hyundai Motor off 1.4% and KB Financial Group down 0.8%.
The increased tensions in Korea also weighed on Tokyo shares, offsetting positives from the yen weakening against the U.S. dollar, normally favorable to exporters' shares. Hitachi closed down 1.5% after the U.K. government deferred a decision on replacing trains for its rail network until 2011. Iron and steel shares were among the best performers, as investors judged the sector a laggard in the recent advance. Nippon Steel added 2.5%.
Base metals
Base metals closed lower on the London Metal Exchange Friday as the dollar surged and the markets failed to shrug off persistent concerns over the sovereign debt situation in Europe and the potential for further interest rate increases in China. The euro lost ground as investor jitters over the sovereign debt situation drove investors into the perceived safety of the dollar.
The firmer greenback put pressure on the metals as it climbed to a fresh two month high against the single European currency, making the dollar-denominated commodities appear more expensive to other currency holders. An announcement by the Shanghai Futures Exchange that it will increase margin rates for its copper, aluminum and zinc contracts from Nov. 30 also helped the metals reverse the previous session's gains.
Oil prices fell slightly Friday as the dollar jumped on worries that the euro zone debt crisis would continue to spread. Light, sweet crude for January delivery settled down 10 cents at $83.76 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures settled down 52 cents, or 0.6%, at $85.58.
Comex gold futures fell as fresh concerns about Portugal's sovereign debt sparked an investor rush to the safe harbor of the dollar. The most actively traded contract, for December delivery, settled down 0.8%, or $10.60, at $1,362.40 a troy ounce on the Comex division of the New York Mercantile Exchange.
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