Investors abandoned the rally that boosted markets in the U.S. and Europe through midweek, even as Warren E. Buffett signaled his confidence in the future by investing $5 billion in Bank of America.
The S&P Retail Index fell 1.6 percent, or 7.98 points, to 487.83, as the Dow Jones Industrial Average declined for the first time this week, dropping 1.5 percent, or 170.89 points, to 11,149.82.
Traders will now turn their attentions to Federal Reserve chairman Ben S. Bernanke, who is due to speak at the bank’s annual conference in Jackson Hole, Wyo., Friday. There was some speculation that Bernanke would hint at a new plan to spark the U.S. economy, but those hopes faded as the week wore on.
Related Articles
European traders pushed the FTSE 100 in London down 1.4 percent, the CAC 40 in Paris down 0.7 percent and the FTSE MIB in Milan down 0.3 percent.
You May Also Like
The DAX in Frankfurt fell 1.7 percent, driven down by rumors that ratings agencies planned to downgrade Germany’s debt — which the agencies denied — along with rumors that the country would also implement a ban on short selling stocks. While Germany didn’t ban short selling, France, Belgium, Italy and Spain all voted to extend their short-selling bans today. The practice can allow investors to benefit when stock prices fall.
The majority of retail and luxury stocks had a tough day, after gains in earlier trading. French Connection fell 3.9 percent, Unilever fell 2.2 percent, Marks & Spencer fell 4.4 percent and L’Oréal fell 1.3 percent. Among the few that gained were ASOS, up 2.4 percent; Hugo Boss, up 1.4 percent, and LVMH, up 1.2 percent.
More glum news came from Britain’s Confederation of British Industry, which said today that the country’s retail sales volumes fell 14 percent in August compared with a year earlier. It was the biggest decline in sales volumes since May 2010. Judith McKenna, chair of the CBI distributive trades panel and chief operating officer at Asda, noted, “Sales volumes fell at a pace not seen in over a year, as consumers have continued to see their real incomes squeezed by a combination of inflation and weak wage growth.”
The trading day started out on the upswing in Asia, where the Nikkei 225 gained 1.5 percent in Tokyo and the Hang Seng Index rose 1.5 percent in Hong Kong.