U.S. shares moved lower on Friday, extending losses to post their worst weekly performance in months after the release of soft retail data and a continued slump in commodities that weighed down on the market. The end of the session also saw the beginning of reports regarding the deadly attacks in Paris. Last week the S&P 500 moved below its 200-day moving average, considered to be a main support level, prompting many to predict further declines. Friday’s declines followed disappointing earnings reports from large retailers such as Nordstrom (N:JWN) and JC Penney (N:JCP) as well as lower-than-expected retail sales and inflation data. Analysts voiced their concern that the continued slump in energy prices and improving employment data in the U.S. failed to translate into more spending by consumers. The Standard and Poor’s 500 declined 22.93 points, or 1.12%, to trade at 2,023.04 as nine out the index’s 10 sectors close in the red. The consumer discretionary and tech sectors led the decliners as the index posted a 3.6% weekly decline, its worst since the week of September fourth. The Dow Jones Industrial Average fell 202.83 points, or 1.16%, to trade at 17,245.24. The index fell 3.7% over the week, also posting its worst weekly performance since early September. 28 components finished lower, with Apple (O:AAPL), Cisco Systems (O:CSCO) and Exxon Mobil (N:XOM) declining 2.92%, 5.82% and 1.65%, respectively. The Nasdaq Composite shed 77.2 points, or 1.54%, to trade at 4,927.88 as the index posted a 4.3% weekly decline, its worst since August.
Last week was riddled with concerns over global economic growth, spurred by weaker-than-expected data from China, the world’s second largest economy. Europe also provided soft GDP data, adding to the concerns. The Federal Reserve’s likely December interest rate hike has also resulted in a stronger dollar, which is weighing down strongly on the dollar-denominated commodity market. Friday’s U.S. data has shown a decline in consumer spending and inflation. U.S. retail sales rose 0.1% in October, well below expectations for a 0.4% increase. The leading decliners in terms of spending were grocery stores, gas stations and car dealerships. Furthermore, U.S. producer prices moved 0.4% lower in October. Cleveland’s Fed President Loretta Mester was quoted in stating that remaining at the current interest rates may pose a risk to financial stability, adding that weak third-quarter GDP data doesn’t necessarily point towards a persistent economic slowdown.
This week’s major economic data releases begin today, with the release of Japanese GDP data. U.S. and UK inflation will be released on Tuesday, followed by statements from the Federal Reserve on Wednesday. The Bank of Japan will post its interest rate decision on Thursday, followed by the yearly Canadian inflation rate later on Friday.