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U.S. stocks end worst week in a month with sharp losses, as oil weighs

Published 12/11/2015, 04:22 PM
Updated 12/11/2015, 04:36 PM
The Dow, NASDAQ and S&P all fell broadly on Friday
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Investing.com -- U.S. stocks ended one of their worst weeks of 2015 with sharp losses on Friday, as a week-long commodity rout continued to drag down the major indices.

Energy stocks retreated on Friday, one day after a rare upward move, as U.S. crude futures plunged below $36 a barrel, falling to its lowest level since February, 2009. Bearish comments from the International Energy Agency on Friday sparked the latest sell-off, after the influential Paris-based organization said in a monthly oil report that it does not expect an oversupplied global energy market to correct its imbalance anywhere in the near future. In 2016, the IEA also anticipates demand growth to slow considerably from 2015 forecasts around 1.8 million barrels per day. As a result, stocks in the energy sector plummeted more than 3% on the day weighing on U.S. equities markets overall.

The Dow Jones Industrial Average fell 309.54 or 1.76% to 17,265.21, while the NASDAQ Composite index lost 111.71 or 2.21% to 4,933.46, each capping their least productive weeks in more than a month. The S&P 500 Composite index, meanwhile, dropped by 39.86 or 1.94% to 2,012.37, as all 10 sectors closed in the red. Besides the energy industry, stocks in the Financials, Technology, Consumer Services and Basic Materials sectors all fell by more than 2% on the session.

The CBOE Volatility Index, a popular measure of implied volatility on the S&P 500, spiked by nearly 30% on Friday to 24.83, ahead of next week's critical interest rate decision by the Federal Reserve. A rate hike is generally viewed as bearish for U.S. equities as investors depart from their positions in stocks to pile into higher yield assets in the fixed income market.

The top performer on the Dow was Procter & Gamble Company (N:PG), which fell 0.01 or 0.01% to 77.78 in the wake of a plan unveiled earlier this week to overhaul its advertising strategy. Last year, the Cincinnati-based conglomerate which owns Tide detergent, Crest toothpaste and Gillette razors among other prominent brands, spent more than $8 billion in advertising.

The worst performer was EI du Pont de Nemours and Company (N:DD), which fell 4.11 or 5.51% to 70.44 after the major chemical giant announced a $130 billion merger with Dow in a deal that could create the second-largest chemical company ever. If the deal gains approval from federal regulators, the new company could subsequently be split into three divisions consisting of agricultural, material services and specialty product segments. On Wednesday, DuPont (N:DD) shares surged by more than 10% after the Wall Street Journal reported that a deal could be imminent.

The biggest gainer on the NASDAQ was Whole Foods Market Inc (O:WFM), which surged 2.59 or 8.27% to 33.92 following a report from analysts at Benziga that private equity firms Cerberus and 3G Capital were considering to make a bid for the natural foods grocer. Previously, shares in Whole Foods were down by roughly 30% over the last 12 months. The worst performer was NXP Semiconductors NV (O:NXPI), which fell 5.18 or 5.86% to close at 83.28.

Whole Foods was also the top performer on the S&P 500, just above Corning Incorporated (N:GLW) which jumped 0.99 or 5.57% to 18.68. On Friday, the Upstate New York materials giant agreed to exchange its interest in Dow Corning with the newly-former DuPont-Dow company for $4.8 billion and a 40% stake in Hemlock Semiconductor. The worst performer was Southwestern Energy Company (N:SWN), which fell 0.89 or 12.97% to 5.97.

On the New York Stock Exchange, declining issues outnumbered advancing ones by a 2,735 to 384 margin.

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