Equities dip as Dow heads for longest weekly slump

Dow Jones:11,951.91 (–172.45) Nasdaq:2,643.73 (–41.14) S&P 500:1,270.98 (–18.02)

US STOCKS fell yesterday, extending the longest weekly Dow Jones Industrial Average slump in more than eight years, amid concern the global economy is slowing.

Caterpillar and Boeing dropped at least 2 per cent, pacing losses among companies most-tied to economic growth.

Exxon Mobil fell 1.7 per cent as crude oil tumbled the most in four weeks.

The Dow Jones industrial average fell 172.45 points, or 1.42 per cent, to 11,951.91.

The Standard & Poor’s 500 Index slid 18.02 points, or 1.40 per cent, to 1,270.98.

The Nasdaq Composite Index tumbled 41.14 points, or 1.53 per cent, to 2,643.73 at the close.

The Russell 2000 Index and the Nasdaq Composite Index erased their 2011 gains yesterday.

“It’s a shortage of buyers,” said Michael Shaoul, chairman of Marketfield Asset Management in New York.

“The economically sensitive stuff is going to be weak while the data is weak. In addition, we’re going to go through a period of over regulation of the large banks. It’s going to lead to significantly less profitability,” he said.

About $1 trillion was erased from American equity markets between the S&P 500’s peak in April and yesterday amid weaker than expected economic reports. The index has retreated 6.8 per cent since the end of April as sales of existing homes unexpectedly declined, growth in industrial production stopped and the unemployment rate rose.

Federal Reserve Chairman Ben Bernanke said this week that the US recovery was “frustratingly slow”. He also said the central bank should maintain record monetary stimulus, while giving no indication he was planning a third round of asset purchases known as quantitative easing, or QE3.

Global stocks fell yesterday after China reported a lower than estimated $13.1 billion trade surplus in May, as surging imports signaled the nation’s demand may support global growth while adding pressure for higher interest rates.

Stocks also fell after UK manu-facturing dropped more than economists forecast as an extra public holiday for the royal wedding hurt orders and the impact of the Japanese earthquake hit supplies. – (Bloomberg/Reuters)