US stocks extended the worst weekly slump since November 2008, as stronger-than-forecast jobs growth was overshadowed by concerns that America may lose its top credit rating, and Europe’s debt crisis will spread. Treasuries and the dollar fell, while commodities erased gains.
The Standard & Poor’s 500 Index reversed an early 1.5 percent rally and lost 1.3 per cent at 1,184.29 at 11:46 am in New York. The benchmark gauge for US stocks is down more than 8.4 per cent over the past five days.
Ten-year Treasury yields rose seven basis points to 2.47 percent after climbing as much as 12 points earlier. The S&P GSCI Index of commodities declined one per cent as lead and zinc tumbled more than five per cent. The Dollar Index decreased 0.2 per cent.
The S&P 500 surged in the first five minutes of trading after the jobless rate dropped to 9.1 per cent in July as the nation added 117,000 jobs and wages climbed, then the index took less than 20 minutes to erase its advance. S&P spokesman John Piecuch said in an e-mail that the ratings company won’t comment on speculation the US rating will be cut. Moody’s Investors Service and Fitch Ratings this week affirmed their AAA ratings on the US.
“The jobs report was surprisingly good, the economy is still growing, but that doesn’t mean that you won’t have challenges to overcome,” Bruce McCain, who helps oversee $22 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland, said in a telephone interview.
“The fear of a downgrade will be with us for a while. It’s time to become more cautions, not defensive, but cautious.”
