Friday's market performance turned out to be anything but an encore to the more than 550 point rally in the Dow in Thursday's trading session. The Dow, now slightly below the 8,500 point level, lost 3.82% or over 337 points, the majority of which were lost in the day's final hour of trading. The S&P 500 and Nasdaq fared worse, losing 4.17% and 5% respectively. The S&P closed at 873.29, while the Nasdaq finished the week at the 1,516 point level. Here is a look at the weekly performance of a few of the major indices across the globe:
Dow Jones Industrial Average: -5%
S&P 500: -6.19%
Nikkei 225: -1.4%
FTSE 100: -3.02%
Oil continued its march downward losing another $1.50 or 2.58% to close at 56.74 a barrel. The 10 year treasury is yielding 3.75%.
In market news, JC Penney reported disappointing third quarter earnings as their net profit came in 50% below third quarter 2007 numbers. In addition, JC Penney gave luke warm guidance, stating that the company expects to come in well below fourth quarter estimates due to weak consumer holiday spending. JC Penney's numbers, coupled with a 2% loss in retail sales for October, dragged the sector down considerably. Shares of JC Penney (JCP:17.27,-2.01(-10.43%)) were down were down over 10%, while shares of Abercrombie and Fitch (ANF:17.79,-4.65(-20.72%)) were down over 20%.
In addition, Citigroup (C:9.52,+0.07(+0.74%)) announced that it will cut over 10,000 jobs predominately in its investment banking division as a metric to curb salary expenses in the current financial markets. Fidelity investments followed suit, cutting an additional 1,700 jobs bringing their total layoffs to 3,000 employees or 7% of their workforce.
The White House on Friday came out and said that they support the $25 billion loan to the Big Three automakers but did not approve the Democrats proposal to use money from the financial bailout to aid the automakers. The loans are intended to revive the American auto industry, allowing the companies to make fuel efficient investments and become more competitive in the global auto industry.
In other news, Fed Chairman Ben Bernanke said at a conference in Frankfurt, "The continuing volatility of markets and recent indicators of economic performance confirm that challenges remain…For this reason, policymakers will remain in close contact, monitor developments closely and stand ready to take additional steps should conditions warrant." These comments seem to be a clear indicator that the Fed will once again cut interest rates when they meet again on December 16. The current rate is 1%.