Stocks turn negative for year on Greece woes

By Angela Moon

NEW YORK (BestGrowthStock) – Stocks turned negative for the year on Friday on fears of another credit crisis stemming from Greece’s souring finances and lingering questions about what triggered the previous session’s dramatic plunge.

The major stock indexes finished Friday’s volatile session from 1 percent to 2 percent lower.

The weekly declines for the Dow and the S&P 500 were the steepest since March 2009 when the market hit a 12-year low. The Nasdaq had its largest weekly drop since November 2008.

Wall Street’s “fear gauge” — the CBOE volatility index (.VIX: ) — rose 25 percent, while the volume of shares traded was the second highest this year.

“Europe’s debt crisis is a big issue that won’t go away any time soon. But with what happened yesterday, investors have grown more concerned that the environment just isn’t safe, period,” said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.

Governments around the world tried to calm markets after fears about Greece’s debt crisis spread further. The cost of protecting European bank debt against default reached levels not seen since the height of 2009’s economic crisis.

The Dow Jones industrial average (.DJI: ) fell 139.89 points, or 1.33 percent, to end at 10,380.43. The Standard & Poor’s 500 Index (.SPX: ) was down 17.27 points, or 1.53 percent, to end at 1,110.88. The Nasdaq Composite Index (.IXIC: ) finished 54 points lower, or 2.33 percent, at 2,265.64.

For the week, the Dow was off 5.7 percent, the S&P 500 was down 6.4 percent and the Nasdaq dipped 8 percent. Over the past two weeks the Nasdaq has fallen more than 10 percent, the threshold which many traders define as a market correction.

The Nasdaq fared the worst on Friday as technology stocks led the broad market lower. Apple Inc (Read more about Apple stock future.) (AAPL.O: ) ended down 4.2 percent to $235.86 and Intel Corp (INTC.O: ) dipped 0.9 percent to $21.31.

The S&P 500 is sitting on top of its 200-day moving averages and “this is where the market has to hold for the bull market to hold up,” said John Kosar, market technician and president of Asbury Research in Chicago. The broad index is up 64 percent from its 12-year low in March.


Thursday’s sell-off drove the Dow average down nearly 1,000 points — its biggest-ever intraday point drop.

The fall may have been exacerbated by erroneous trades that showed some shares briefly fell to nearly zero in value. The Nasdaq and other exchanges said they would cancel erroneous trades.

The U.S. Securities and Exchange Commission held urgent discussions with other regulators to try to shed light on the causes of Thursday’s plunge.

Trades that took place during the worst of Thursday’s drop will be canceled for more than 250 stocks, Nasdaq OMX said, adding to a long list of “busted” transactions on NYSE Euronext’s Arca and other exchanges and trading venues.

The uncertainty around the cancellations could have heightened the day’s price swings as investors examined their holdings.

“It could add to volatility because you have to unwind all of that,” said Kurt Brunner, portfolio manager at Swarthmore Group in Philadelphia.

The volatility index ended up 24.9 percent at 40.95 after rising as high as 42.15 earlier in the day, its highest since April 2009.

Stocks gained some ground after data showed U.S. non-farm payrolls grew at the fastest pace in four years in April as private sector employers ramped up hiring.

About 17.6 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, compared with

last year’s estimated daily average of 9.65 billion.

Declining stocks outnumbered advancing ones on the NYSE by a ratio of about 22 to 9, while on the Nasdaq, about four stocks fell for every one that rose.

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(Additional reporting by Leah Schnurr; Editing by Kenneth Barry)

Stocks turn negative for year on Greece woes