US stocks fell, sending the Standard & Poor’s 500 Index to its worst weekly loss in two months, as Spanish, French and Italian bond yields rose and Fitch Ratings said Europe’s debt crisis poses a threat to US banks.
Alcoa Inc, Chevron Corp and JPMorgan Chase & Co lost at least 8 percent to lead declines in the Dow Jones Industrial Average. Sears Holdings Corp fell 14 percent and Abercrombie & Fitch Co dropped 17 percent after the retailers’ quarterly results trailed forecasts. Marathon Petroleum Corp and HollyFrontier Corp plunged more than 13 percent on speculation refining profits will decline.
The S&P 500 decreased 3.8 percent, the most since the week ended Sept. 23, to 1,215.65. The index closed at the lowest level since Oct. 20. The Dow fell 357.52 points, or 2.9 percent, to 11,796.16.
“In the eurozone you’ve got this horrible crisis and it’s not clear to anyone how it is going to be solved,” George Feiger, chief executive officer of Contango Capital Advisors Inc, the San Francisco-based wealth management arm of Zions Bancorporation, which oversees about US$3.3 billion, said in a telephone interview.
“The most important thing from an American perspective is that they not let the banking system implode, and even that is not guaranteed,” he said.
Equities slumped this week as higher government bond yields in Spain, France and Italy spurred concern the European debt crisis is intensifying outside Greece. The S&P Financials Index slumped 5.6 percent this week, the biggest drop among 10 industries, after the Fitch report spurred speculation that the European crisis poses a threat to earnings.
The Morgan Stanley Cyclical Index lost 4.5 percent as 28 of its 30 stocks retreated. The Dow Jones Transportation Average slumped 2.8 percent. Both fell the most in a week since September.
Banks dropped after Fitch said they face a “serious risk” that their creditworthiness will deteriorate if Europe’s debt crisis worsens. Morgan Stanley slipped 13 percent to US$14.21. JPMorgan dropped 8 percent to US$30.62. Citigroup Inc slid 10 percent to US$26.28.
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