By Steven Russolillo, Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- U.S. shares struggled for direction Friday as a pledgefrom global officials to maintain financial stability failed to alleviateinvestor anxiety over a possible Greek default and the domestic economypotentially spiraling into another recession.
The Dow Jones Industrial Typical recently rose 17 points, or 0.2%, to 10751,after earlier dropping as much as 95 details. The index plunged 675 factors in thelast two sessions and is down about 7% this week, on pace for its worst weeklyperformance since the financial crisis.
The Dow is also down about 16% from its April high, inching closer to the 20%drop that would signal a new bear marketplace. Bank of The us led blue chips higher,rising 4%. Hewlett-Packard helped keep the rally in check, falling 4.7%. Thedecline comes a day after the technology giant’s board ousted Chief ExecutiveLeo Apotheker, and named former eBay CEO Meg Whitman as his replacement.
The Regular & Poor’s 500-stock index rose 4 factors, or 0.3%, to 1133, ledhigher by industrial and consumer discretionary shares. The technology-heavyNasdaq Composite rose 18 points, or 0.7%, to 2473.
“The market remains very nervous over European credit stress and never veryconfident in political officials’ ability to solve the crisis,” said NickKalivas, vice president of financial research at MF Global. “But there’s not alot of positioning in the market appropriate now. People are standing on the sidelineswaiting for things to develop.”
Increasing fears of a global economic slowdown and the markets’ strongdownside momentum overshadowed the assertion by officials of the G20 economiesthat they were committed to keeping the financial system stable and to shoringup growth.
There’s a growing sense amongst traders that governments and central bankswill be unable to obtain growth back again on track. The Federal Reserve’s gloomyeconomic outlook has alarmed investors and resulted in a steep selloff rangingfrom stock to corporate bonds, as well as oil and gold.
The Fed declared earlier this week it would shift its bond holdings towardlonger-maturity bonds. But few traders think this will do much to boostgrowth.
“The reaction here is a bursting of the bubble in the face of the Fed,” saidMichael Gayed, chief investment strategist at Pension Partners. “No matter whatthe Fed does, it’s not going to make a difference this time about.”
Investors also pointed to the renewed debate in Congress as another point ofcontention. The latest budget dispute has brought back again memories of last month’sheated debt-ceiling debate.
“We’ve had inadequate policy responses,” stated Mark Travis, president ofIntrepid Capital Funds. “People are actually starting to zero in on the polarityof U.S. politics.”
In overseas markets, Europe erased early gains to turn broadly lower. TheStoxx Europe 600 earlier fell to its lowest level in more than two years.Moody’s Investors Service downgraded eight Greek banks by two notches Friday,citing expected losses due to their holdings of Greek government bonds. Asianbourses also fell, with China’s Shanghai Composite hitting a 14-month low inintraday trading.
Gold futures fell 3.9% and dropped below $1,674 an ounce. Crude-oil futuresslid 0.7% and traded all around $80 a barrel. The U.S. dollar was down against theeuro and the yen.
No major economic data were scheduled for release Friday. Traders will beattuned to any news out of a meeting of the G20 finance ministers and centralbank governors.
In corporate news, Nike’s fiscal first-quarter earnings rose 15% on continuedsales strength in a key North American marketplace as well as emerging markets Theathletic-footwear maker’s stock rose 5.6%.
Mosaic projected stronger-than-expected fiscal first-quarter revenue and saidthe outlook for the fertilizer industry remains solid, though it estimated per-share earnings below estimates. Shares dropped 5.4%.
Dow component McDonald’s raised its quarterly cash dividend by 15% to 70 centsa share. The fast-food giant’s shares inched up 0.8%.
Elsewhere, American Medical Inform soared 46% after the provider of remotehealth-monitoring services stated it agreed to be acquired by Tunstall HealthcareGroup for $8.55 a share in cash, or about a 50% premium to Thursday’s closingprice.
Tibco Software’s fiscal third-quarter profit rose 36% as the business-softwarecompany posted sales growth in both of its main businesses. Shares rose 2.2%.
-By Steven Russolillo, Dow Jones Newswires; 212-416-2180; steven.russolillo@dowjones.com
(END) Dow Jones Newswires 09-23-111119ET Copyright (c) 2011 Dow Jones & Company, Inc.
