By Donna Kardos Yesalavich
NEW YORK (MarketWatch) -- U.S. stocks fell after spending Black
Friday in the red as worries over the euro zone's finances
overshadowed positive readings on the start of the holiday shopping
season.
The Dow Jones Industrial Average (DJI) dropped 95.28 points, or
0.9%, to end at 11092. JP Morgan Chase (JPM) and American Express
fell the hardest, with both stocks losing fell 1.7%.
The Nasdaq Composite (RIXF) dropped 0.3% to 2,534. The Standard
& Poor's 500 index(SPX) declined 0.8% to 1189.
The materials and energy sectors posted the biggest declines
Friday as related commodities fell in a broad move away from risky
assets.
The declines came as investors homed in on Spain as another weak
spot in the euro zone. Spanish Prime Minister Jose Luis Rodriguez
Zapatero moved to dispel the growing anxiety, saying there was
"absolutely" no chance the euro zone's fourth-largest economy would
seek a bailout from the European Union. But his attempt to calm the
markets had little effect; the euro tumbled and the selloff in
Spanish and Portuguese sovereign bonds continued. The euro traded
at $1.3233.
"Besides being one of the larger economies over there, it's a
renewal of contagion worries and ... it just puts further stress on
the EU," said Bernie Williams, vice president of private investment
management at USAA Investment Management.
European leaders sparred over whether to commit more funds to
rescue struggling euro-zone countries, as financial-market pressure
on the region's weakest economies intensified. The European Union's
executive arm, the Brussels-based EU Commission, floated a proposal
on Wednesday to double the size of Europe's 440 billion ($588
billion) bailout fund for euro-zone governments, but the idea was
dismissed by Germany, according to people familiar with the
situation.
The uncertainty of the euro-zone debt situation prompted
investors to pull out of riskier assets, sending crude-oil futures
lower. Metals futures also fell, prompting gold to slip to
$1,362.40 an ounce.
Investors sought safety in the dollar and U.S. Treasurys. The
U.S. Dollar Index (DXY), tracking the U.S. currency against six
others, climbed 0.6%. Gains in Treasurys pushed the yield on the
10-year note (UST10Y) down to 2.87%.
The euro-zone worries overshadowed strong early 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. About 138 million
Americans are expected to go shopping this weekend.
Some $447 billion will be spent during the holiday season, up
2.3% from last year, the National Retail Federation predicts, with
Black Friday weekend seeing about $41.2 billion in business. An NRF
survey also found that up to 138 million people plan to shop this
weekend, higher than the 134 million people who planned to do so
last year.
"The consumer, for all the unemployment worries, the ones that
have jobs have held in there," Williams said.
Still, retail shares were mixed. Wal-Mart Stores (WMT) fell
0.5%; Amazon.com (AMZN) slipped fractionally and TJX Co. (TJX) shed
0.3%, but GameStop (GME) jumped 0.7%, Big Lots (BIG) climbed 0.3%
and Best Buy (BBY) added 0.1%.
Among other stocks in focus, Del Monte Foods (DLM) rose 4.7%
after the maker of pet foods and canned vegetables announced it
agreed to a takeover by an investor group led by Kohlberg Kravis
Roberts & Co. LP in what would be one of the year's largest
private-equity buyouts.