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Saturday, January 14, 2012

WALL STREET : Stocks Claw Back From Heavy Losses

U.S. Stocks Fall on European Debt Downgrade,
End Week in Black
U.S. stocks began Friday pointed south, and ended the session on a decidedly downbeat note. The dive was ignited on a "modestly disappointing" fourth-quarter report from JPMorgan Chase (JPM), and word that Bank of America (BAC) could scale down its U.S. efforts. The Street was also fretting over possible debt downgrades for European Union (EU) nations. Yet, it wasn't until after midday that the hype came to fruition in the form of a downgrade to France's triple-A credit rating from Standard and Poor's (S&P). The latest consumer sentiment index reading was the only true bright spot of the day, but any semblance of optimism from that report was all but forgotten. Against this drab backdrop, all three major market indexes closed with a loss, but ended the week in the black.

The Dow Jones Industrial Average (DJIA – 12,422.06) ended the day down nearly 49 points, or 0.4%, after touching an intraday low of 12,311.79. Among the Dow's 30 components, only nine finished higher, led by a 1.1% jump by Chevron (CVX). BAC and JPM paced the bearish majority with declines of 2.7% and 2.5%, respectively. Verizon (VZ) and Procter & Gamble (PG) finished unchanged. For the week, the blue-chip barometer eked out a 0.5% gain.

The S&P 500 Index (SPX – 1,289.09) backpedaled 6.4 points, or 0.5%. However, the broad-market barometer turned in a 0.9% increase for the week. The tech-rich Nasdaq Composite (COMP – 2,710.67) fared the worst of its counterparts with a roughly 14-point, or 0.5%, drop, but finished the week with a 1.4% trek into positive territory.

"While we cannot say that consumers are 'optimistic,' they appear much less pessimistic compared to last summer when news on the [eurozone] debt crisis turned particularly ugly and the debt-ceiling debate was fought."

“The political agreement does not supply sufficient additional resources or operational flexibility to bolster European rescue operations, or extend enough support for those euro zone sovereigns subjected to heightened market pressures.”

 “It is not the rating agencies who dictate French policy.”


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