Wall Street posts biggest weekly loss in year

July 30th, 2011 - 5:23 am ICT by IANS  

Barack Obama New York, July 30 (IANS) Wall Street ended the dismal week with the biggest decline in about a year as more evidences pointed to a much weaker economic recovery and the deadline of debt talks is drawing near.

The Dow Jones industrial average extended its losing streak to the sixth straight day, falling 96.87 points, or 0.79 percent, to 12,143.24.

The Standard & Poor’s 500 dropped for a fifth day, ending the choppy session 0.65 percent lower to 1,292.28.

The Nasdaq Composite Index declined 9.87 points, or 0.36 percent, to 2,756.38.

Both the blue-chip Dow and the broader S&P; 500 declined about 4 percent on the week, the biggest weekly losses since last summer.

The weeklong slide came as the debt talks in Washington showed no signs of progress. More and more investors were worried that Congress could not reach a reliable deficit compromise before the Aug 2 deadline.

President Barack Obama urged Congress to reach an agreement on the debt ceiling as soon as possible to avoid the catastrophe.

“There are multiple ways to resolve the debt ceiling mess, but it has to be bipartisan and it has to happen fast,” Obama said. “We’re almost out of time.”

Despite concerns, most investors were still betting on a last-minute deal out of Washington. However, traders believed the US government would lose its gold-plated triple-A rating even if the debt limit is raised in time.

“Those talks of default are probably overdone but certainly a downgrade is very realistic. The fact that they are unable to come to an agreement on raising the debt ceiling, is certainly causing nervousness in our market,” said Kenneth Polcari, managing director at ICAP Equities.

Besides the impasse in Washington, the latest data showed the US economy was losing momentum, which fueled the nervousness and frustration in the market.

According to the report released by the commerce department Friday, the country’s gross domestic product grew at an annual rate of 1.3 percent in the second quarter, after having grown at an annual rate of 0.4 percent in the first quarter, which is also sharply revised down from the previous estimates of 1.7 percent.

Related Stories

Tags: , , , , , , , , , , , , , , , , , , ,

Posted in Business |