US Stock Market Tumbles

September 23, 2012

NEW YORK--Stocks edged lower Friday, Dow suffered major setback in three weeks after gaining in the afternoon.

The Dow Jones Industrial Average was down to  17.46 points, or 0.1%, to 13579.47, raising its weekly gains.

The Standard & Poor's 500-stock index dipped 0.11 point, or less than 0.1%, to 1460.15. Materials and consumer staples shares fell while the telecom and healthcare sectors rose. The Nasdaq Composite Index rose 4 points, or 0.1%, to 3179.96.

For the week, the Dow gave up 0.1% while the S&P 500 fell 0.4%. Earlier this month, stocks had rallied as the European Central Bank and Federal Reserve announced bond-buying programs meant to jolt economic growth.

"A question that investors keep asking themselves is, 'Can this risk rally continue without the help of the European Central Bank and the Fed?'" said Andres Garcia-Amaya, global market strategist at J.P. Morgan Funds, which owned $396 billion in assets said  "We don't expect earnings growth to be the big driver going forward."

Volume surged into the close as traders positioned themselves for the quarterly rebalancing of S&P Dow Jones Indices's U.S. stock indexes, including the S&P 500. Also boosting activity, stock index futures, stock index options, stock options and single-stock futures expired Friday, an occurrence known as a "quadruple witching."

European markets were broadly higher, with the Stoxx Europe 600 up 0.5% after a report that the European Commission and Spain are working to ensure structural overhauls required for a bailout are in place before the government asks for help.

Spain's IBEX 35 index gained 2.6%, while the yield on Spanish 10-year government bonds declined.

Asian markets gained ground, bouncing from the previous session's losses, with a rally in Japanese electronics company Sharp helping give sentiment a lift. Japan's Nikkei Stock Average added 0.3% after a report the company was in talks with Intel on a capital alliance. China's Shanghai Composite bounced off a 3 1/2-year low to close up 0.1% but fell 4.6% on the week, its biggest weekly loss since October.

Crude-oil prices rose 0.5%, to settle at $92.89 a barrel, after falling 7.2% over the previous four sessions. Gold prices edged up 0.4%, to settle at $1,775.50 a troy ounce. The dollar inched lower against both the euro and yen. The yield on the 10-year Treasury note declined to 1.760%.

In the corporate arena, KB Home jumped 16% after reporting a fiscal third-quarter profit, bucking analysts' expectations for a loss. The builder delivered more homes at higher prices.

Darden Restaurants advanced 4.6% after the Olive Garden and Red Lobster restaurant operator reported better-than-expected quarterly earnings.

Apple advanced 0.2% as crowds gathered at the company's stores for the kickoff of global iPhone 5 sales.

Research In Motion dropped 6.5% after saying BlackBerry smartphones were experiencing service problems in Europe, the Middle East and Africa.

McDonald's added 0.6% and Texas Instruments gained 0.5% after both companies raised their dividends.

Michael Kors Holdings jumped 9.3% after the luxury accessories designer raised its fiscal second-quarter and full-year earnings outlook on a rise in same-store sales.