Dow heads for worst weekly drop since 2008 on economic concern

NEW YORK – U.S. stock futures fell, indicating the Dow Jones Industrial Average will have the biggest weekly decline since 2008, as policy makers failed to reassure investors they can support the global economy.

Equity futures trimmed losses as a European Central Bank official said policy makers may reintroduce 12-month loans to banks to ease funding strains. Bank of America Corp., the biggest U.S. lender, retreated 1 percent, paring an earlier decline. Alcoa Inc. and Schlumberger Ltd. dropped at least 1.6 percent as commodities slumped. General Electric Co. and Ford Motor Co. sank more than 1.5 percent to pace declines in companies most-dependent on economic growth.

Standard & Poor’s 500 Index futures expiring in December slipped 1.3 percent to 1,109 as of 8:40 a.m. in New York, after falling as much as 1.9 percent earlier. The benchmark gauge for U.S. equities has fallen 7.1 percent this week. Dow futures dropped 125 points, or 1.2 percent, to 10,525 Friday. The index has slipped 6.7 percent so far this week.

“It’s a risk-off trade and it’s going to continue,” Matt McCormick, a money manager at Cincinnati-based Bahl & Gaynor Inc., which oversees $4 billion, said in a telephone interview. “You have lack of confidence and there are no real macro catalysts for growth.”

- Advertisement -

U.S. stocks fell this week on the Federal Reserve’s assessment that the turmoil caused by Europe’s crisis is taking a toll on the economy. The S&P 500 has fallen 17 percent since April 29 amid concern about a global economic slowdown. Benchmark indexes for the U.S., U.K., Canada, Singapore and New Zealand are the only ones among 24 developed countries that haven’t fallen at least 20 percent from their highs, entering a bear market.

Global stocks dropped today as a pledge by Group of 20 nations to tackle rising risks failed to ease concern the global economy is on the brink of another recession. Policy makers are “committed to a strong and coordinated international response to address the renewed challenges facing the global economy,” G-20 finance ministers and central bank governors said in a statement late Wednesday in Washington.

No posts to display