U.S. markets closed at mid-day on Friday, ending the worst week of trading in two months after posting seven straight sessions of losses.
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Though Wall Street traded higher for most of today’s session on hopes that “Black Friday” would support major retailers, gains were ultimately offset by headlines out of Europe that turned all three stock indices negative less than 20 minutes before close.
Yields on Italy’s debt more than doubled in a bond auction today, sparking a sell-off in world markets. High debt yields in Spain, France, and even Germany suggest that investing in the region is risky at best.
Standard & Poor’s downgraded Belgium’s credit rating to double-A from double-A-plus, citing concerns about funding and market pressures, while Moody’s Investors Service downgraded Hungary to junk.
Meanwhile, U.S. lawmakers were unable to surmount politics and partisan differences to effect a debt deal this week, throwing in the towel to automatic cuts after months of fruitless discussions in which both Republicans and Democrats refused to cede ground on key issues.
The supercommittee’s failure to effect a deal raises the risk that a payroll tax holiday and emergency unemployment benefits will not be extended when they expire at the end of the year. The fiscal drag, together with the European debt crisis, threatens to undermine consumer spending early next year.
The Dow slipped 25.77 points today, falling 0.23% to close at 11,231.78. Microsoft (NASDAQ:MSFT) acted as a bit of a weight on the Dow today, declining 0.69%. Microsoft shares have decline 12.93% this year, while Apple (NASDAQ:AAPL) has grown 12.69% and IBM (NYSE:IBM) has climbed more than 20%. Of course, you wouldn’t know it from their performances today. Apple declined 0.93% while IBM fell 0.50%.
The Standard & Poor’s 500 Index, considered to be the most accurate gauge of the large cap U.S. equities market, declined 3.12 points, or 0.27%, to 1,158.67 today. All of the index’s top 10 stocks, by market cap, were in negative territory by the end of the day, with Exxon (NYSE:XOM) and Chevron (NYSE:CVX) accounting for the biggest drops.
The Nasdaq Composite shed 18.57 points today, or 0.75%, to settle at 2,441.51. Netflix (NASDAQ:NFLX) shares pressured the Nasdaq, falling a whopping 6.78% today as investors continue to drop the stock after a serious of bad business moves left the door open for the competition.