Markets Fall on News of European Debt and Conflict between North and South Korea
November 26, 2010Stocks sank in early trading during a shortened session on Wall Street amid lingering uncertainty surrounding Europe's debt troubles and a warning from North Korea. The Skanner News Video: North, South Korea Drift toward war
European stock markets and the euro fell Friday as worries mount that Portugal will need cash from other European Union countries to help manage its debts before the country's borrowing costs rise too high.
Portugal's finance minister said the country rejected the idea floated by some E.U. members that it should take a bailout before bond investors force the country's bond yields up. Meanwhile, Germany and France have said they would like a quicker resolution to the ongoing debt crisis.
Fears about the conflict between North and South Korea are also weighing on stocks. North Korea warned Friday that plans by South Korea and the U.S. to stage military maneuvers have put the Korean peninsula on the brink of war. North Korea fired artillery shells at a South Korean island on Tuesday, killing four people.
The Dow Jones industrial average fell 87, or 0.77 percent, to 11,101. The Standard & Poor's 500 index lost 8, or 0.6 percent, to 1,190. The Nasdaq composite index fell 6, or 0.2, to 2,536.
Falling shares outpaced rising shares by more than two to one on the New York Stock Exchange, with 249 million shares trading hands.
The euro dropped 0.85 percent on the day at $1.3237, slightly above its two-month low of $1.3199. The Euro Stoxx 50, which tracks the shares of blue chip companies in countries that use the euro, slipped 0.53 percent.
Friday also marks the unofficial start of the holiday shopping season. Black Friday, a crucial event for retailers, has recently been the busiest shopping day of the year. Sales during the Thanksgiving weekend made up 12.3 percent of all holiday revenue last year, according to research firm ShopperTrak. Black Friday accounted for half of that.
U.S. stock markets will close at 1 p.m. EST Friday instead of the usual 4 p.m. Markets were closed yesterday for the Thanksgiving holiday.
Stock indexes are ending the week almost flat, after being buffeted by economic data, European debt troubles and the clash off the coast of South Korea. Shares were mixed on Monday after the Federal Bureau of Investigation raided the offices of two hedge funds as part of a broad insider trading probe. They fell on Tuesday, with the exchange of fire between North and South Korea and as the Federal Reserve lowered its forecast for growth through next year.
Markets surged on Wednesday after a batch of economic reports buoyed hopes that the U.S. economic recovery was gaining strength. The reports showed that Americans' income rose and consumer spending climbed in October. And fewer people filed first-time claims for unemployment benefits last week.
Since last Friday's close, the Dow has lost 106 points and the Standard & Poor's 500 index has lost 10. The Nasdaq composite index has gained 18 for the