The wild ride in financial markets, by the numbers

AP News
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Posted: Aug 05, 2011 6:55 PM
The wild ride in financial markets, by the numbers

Global financial markets have been on a wild ride the past two weeks. Political gridlock in Washington brought the U.S. close to defaulting on its debt; European leaders scrambled to prevent a debt crisis from spreading to Italy and Spain; and news on the U.S. economy showed that growth has slowed. Here's how markets reacted.

U.S. MARKETS:

U.S. stock indexes entered a correction, which means a decline of at least 10 percent from a recent peak. Corrections are common during bull markets and don't necessarily mean that stocks are beginning an extended decline. However, a drop of 20 percent or more usually signals the start of a bear market, or a long period of stock losses.

_ The Dow Jones industrial average has fallen 1,280 points, or 10 percent, from July 21, when it closed at 12,724. It's down 699 points this week, the biggest weekly point drop since October 2008. The weekly drop of 5.8 percent was the worst since March 2009.

_ The Standard & Poor's 500 index, the market measure most widely used by professional investors and mutual funds, is 10.8 percent below where it was on July 22, when its recent decline started. The 7.2 percent decline this week was the worst week since November 2008.

_ The Nasdaq composite index, which includes many technology companies, is down 11.4 percent since July 22. It lost 8.1 percent this week, its worst week since November 2008.

_ The Russell 2000 index of smaller U.S. companies is down 15 percent since July 22. Its 10.3 percent decline this week was the worst since November 2008.

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WORLD MARKETS:

Overseas stock markets also took a beating this week, especially in Europe. Indexes in Italy and Spain fell more than 10 percent, as did Germany's DAX and the CAC-40 in France. Asian markets didn't fare quite as poorly.

Europe:

_ Germany's DAX fell 12.9 percent this week, its worst loss since October 2008.

_ England's FTSE 100 fell 9.8 percent, its worst loss since November 2008.

_ Italy's FT-SE MIB fell 13.1 percent, its worst loss since March 2009.

_ Spain's IBEX 35 fell 10 percent, its worst loss since May 2010.

Asia:

_ Japan's Nikkei 225 fell 5.4 percent, its worst loss since March.

_ Hong Kong's Hang Seng fell 6.7 percent, its worst loss since March 2009.

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U.S. GOVERNMENT BONDS

Investors rushed to buy Treasurys in search of safer investments. The price of the two-year Treasury note rose so high that its yield, which moves in the opposite direction of its price, fell to a record low. The yield on the 10-year Treasury serves as the benchmark for many kinds of loans. When it falls, rates on mortgage and other consumer loans often follow.

_ The yield on the two-year Treasury note fell as low as 0.26 percent on Thursday, a record low, before rising to 0.29 percent Friday. It was at 0.36 percent a week earlier.

_ The yield on the 10-year Treasury note fell to 2.56 percent from 2.80 percent a week earlier. On Thursday, it fell to 2.39 percent, the lowest level since October.

_ The yield on the 30-year Treasury bond fell to 3.85 percent from 4.12 percent a week earlier.

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GAINERS AND LOSERS ON WALL STREET

All three major U.S. stock indexes lost more than 5 percent over the week. The steepest losses were from companies whose profits are most dependent on a growing economy. These include oil companies, raw materials producers and banks.

_ Bank of America Corp. fell 15.9 percent over the week, the biggest loss among the 30 stocks in the Dow Jones industrial average.

_ Alcoa Inc. fell 13.2 percent on worries that a slowing global economy will mean weaker demand for aluminum.

_ Kraft Foods Inc. was the only stock among the Dow 30 to rise over the week, gaining 1.4 percent. It will split into two companies, with one focusing on snacks and the other on groceries.

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COMMODITIES:

Fears about weakening economies around the world led investors to sell oil and natural gas. They worried about lower energy demand. But the nervousness also drove up the price for gold, which is considered a safer investment.

_ Crude oil fell 8.8 percent over the week.

_ Natural gas fell 7.7 percent.

_ Gold ended the week at $1,651.80 per ounce. Earlier in the week, it rose as high as $1,668. Adjusted for inflation, it's still below its 1980 peak.