Dow sinks more than 650 points
By Alex Veiga ASSOCIATED PRESS
U.S. stocks slumped Friday and the market suffered its worst week in two years, as fears of inflation and disappointing quarterly results from technology and energy giants spooked investors. The Dow Jones industrial average dropped by more than 650 points.
Bond yields rose and contributed to the stock market swoon after the government reported that wages grew last month at the fastest pace in eight years. The Dow had its worst decline since June 2016, while the broader Standard & Poor’s 500 index had its biggest one-day percentage drop since September 2016.
“We’ve enjoyed low interest rates for so long, we’re having to deal with a little bit higher rates now, so the market is trying to figure out what that could mean for inflation,” said Darrell Cronk, head of the Wells Fargo Investment Institute.
The S&P 500 fell 59.85 points, or 2.1 percent, to 2,762.13. The index has lost 3.9 percent since hitting a record high a week ago.
The Dow lost 665.75 points, or 2.5 percent, to 25,520.96. The Nasdaq slid 144.92 points, or 2 percent, to 7,240.95. The Russell 2000 index of smaller-company stocks gave up 32.59 points, or 2.1 percent, to 1,547.27.
U.S. employers added a robust 200,000 jobs in January, slightly above market expectations for an 185,000 increase. Meanwhile, wages rose sharply, suggesting employers are competing more fiercely for workers. The figures point to an economy on strong footing even in its ninth year of expansion, fueled by global economic growth and healthy consumer spending at home.
Some economists were predicting Friday that the central bank will raise its benchmark rate four times this year, rather than the three times most previously expected.
The market slide may have been overdue, particularly after the strong start for stocks this year where the S&P 500 had its best January in two decades.
Gold fell $10.60 to $1,337.30 an ounce. Silver dropped 45 cents to $16.71 an ounce. Copper lost 2 cents to $3.19 a pound.
The dollar rose to 110.28 yen from 109.42 yen on Thursday. The euro weakened to $1.2451 from $1.2502.