A four-day rally in the stock market came to an end on Friday as signs of a slowing economy rattled commodity markets, weighing down energy and mining companies.
The price of crude oil dropped 2 percent, to $91 a barrel, as weak United States economic reports followed forecasts for diminished demand for oil.
Gold plunged $64, to $1,501 an ounce, reaching its lowest level since July 2011.
One cause for the latest plunge was a government report that wholesale prices in the United States fell the most in 10 months in March. Traders tend to sell gold when inflation wanes. Traders also pushed gold prices lower on reports that Cyprus may sell some of its gold reserves, possibly prompting other weak European countries like Italy and Spain to do the same.
Compared with the commodities markets, the stock market looked stable. The Dow Jones industrial average dropped just 0.08 of a point to close at 14,865.06. The Standard Poor’s 500-stock index lost 4.52 points, or 0.3 percent, to 1,588.85.
The two major indexes finished the week with strong gains: The Dow rose 2.1 percent, and the S. P. 500 rose 2.3 percent.
David Joy, the chief market strategist for Ameriprise Financial, said it was as if the stock market was telling a different story from the bond and commodity markets.
Copper and other industrial metals slid along with gold on Friday, while Treasury yields sank near their lows for the year. He said the moves implied that traders in those markets were more worried about an economic slowdown.
“It gives me pause,” Mr. Joy said. “Commodities and bonds are telling stock investors: don’t be in such a hurry to say the U.S. economy is in great shape.”
The sharp drop in gold futures tugged down mining companies. Barrick Gold shares lost 8.5 percent, to $22.62, Newmont Mining stock fell 5.9 percent, to $36.37, and Freeport-McMoRan shares fell 2.7 percent, to $31.92.
Materials and energy stocks fell the most of the 10 industry groups in the S. P. 500, with materials stocks down 1.5 percent and energy shares off 1.3 percent.
The Nasdaq composite dropped 5.21 points, to 3,294.95, a fall of 0.2 percent.
A handful of reports issued Friday heightened concerns. Sales at retailers fell in March, and companies restocked their shelves at a much slower pace in February than in the month before. That is usually a sign that companies expect weaker spending from consumers and businesses. A measure of consumer sentiment from the University of Michigan also slumped.
Still, the stock market has held up well, leaving “a lot of investors scratching their heads,” said Lawrence Creatura, a fund manager at Federated Investors.
This earnings season will most likely determine which direction the market takes, Mr. Creatura said. Next week, when Bank of America, Google and other big names turn in their quarterly results, could make the difference.
Wells Fargo reported stronger quarterly profits on Friday, but its revenue fell short of Wall Street’s forecasts. The bank’s stock lost 0.8 percent, to $37.21.
Treasury yields were near their lows for the year. The yield on the 10-year note dropped to 1.72 percent, from 1.79 percent late Thursday. The low point of the year, 1.69 percent, was reached April 5. The price rose
21/32, to 102 17/32.
Article source: http://www.nytimes.com/2013/04/13/business/economy/daily-stock-market-activity.html?partner=rss&emc=rss
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