The Dow took a triple-digit dive on Friday amid a broad selloff but the sea of red did little to put a damper on Wall Street's strongest three-week rally since 1982.
Today's Markets
The Dow Jones Industrial Average slid 148.38 points, or 1.87%, to 7776.18, the S&P 500 lost 16.92 points, or 2.03%, to 815.94 and the Nasdaq Composite sank 41.80 points, or 2.63%, to 1545.20. The consumer-friendly FOX 50 fell 10.47 points, or 1.68%, to 612.41.
The selloff came as Wall Street is in the midst of one of its hottest streaks ever thanks to newfound optimism and severely depressed stock prices. Friday's tumble ended a 13-day streak that saw the Dow surge 21% -- its fastest 20% plus rise since July 1938.
“It’s been a lot of fun. We came out of an extremely oversold position. But anyone who thinks we are out of the woods is getting way ahead of the curve,” NYSE trader Ted Weisberg of Seaport Securities told FOX Business.
Even with Friday's losses, the Dow still gained 498 points this week and posted its first three-week win streak since lastMay. Over that span, the benchmark index surged 17.34% -- its strongest three-week gain since Sept. 1982. Meanwhile, the S&P is up 11% in March, putting the broad index on pace for one of its top 10 best months on record.
“Obviously it makes sense for a little bit of profit-taking,” said Ryan Detrick, equity analyst at Schaeffer’s Investment Research. “All in all, it was a pretty constructive day when you look at the whole scheme of things. A few weeks ago it was all gloom and doom.”
IBM (IBM), Citigroup (C) and American Express (AXP) led the way down on the Dow on Friday. There were only a handful of positive blue-chip stocks, including General Motors (GM) and Coca-Cola (KO).
The Nasdaq Composite, which returned to the red on the year, tumbled even further than the Dow as tech giants like Amazon.com (AMZN)and Microsoft(MSFT) fell.
Miller Tabak's Peter Boockvar noted Friday's selloff came on the weakest volume of the month. The slow volume could indicate a lack of conviction (or just a lot of three-day weekends).
While analysts blamed profit-taking for Friday's action, it's clear dark clouds remain on the horizon as Wall Street awaits the results of stress tests on troubled banks, another dreadful monthly jobs report and an avalanche of earnings reports that aren't likely to impress.
"I think it's a mistake to get too excited, too soon," said Weisberg.
The energy sector was one of the biggest drags on the market Friday, diving nearly 3%. Stocks like Schlumberger (SLB) and Hess (HES) plunged even further as crude sank $1.96 per barrel to settle at $52.38 amid profit-taking and a stronger dollar. Gold’s two-day win streak ended as the metal slumped $16.80 per ounce to $924.10.
D.C. Stays at the Forefront
Financial stocks also tumbled 3%, receiving no momentum from the conclusion a meeting in Washington between President Barack Obama and the CEOs of 14 of the nation’s largest banks, including JPMorgan Chase (JPM), Goldman Sachs (GS) and Wells Fargo (WFC).
Bankers described the meeting as a positive exchange of ideas and an effort to work together.The meeting came as the White House sought to balance populist outrage swarming Washington with the need for the private sector to join its bank bailout plan.
Meanwhile, the fate ofGeneral Motors (GM) and Chrysler LLCcould soon be decided as the White House said it will announce its plan to help the troubled auto makers on Monday. The announcement will come even as GM appears unlikely to meet a March 31 restructuring deadline for gaining concessions from its union and bondholders, The Wall Street Journal reported.
Corporate Movers
MGM Mirage (MGM) provided $200 million in funding needed to keep its $8.6 billion City Center development afloat, including $100 million owed by its partner in the LasVegas development. The Journal reported earlier in the day that the partners could balk at the payments, forcing a bankruptcy filing.
Charter Communications (CHTR), the cable company led by Microsoft (MSFT) co-founder Paul Allen, filed for bankruptcy protection to cut its debt by $8 billion. Charter, which is the fourth-largest U.S. cable operator, plans to fund the restructuring with cash on hand and operating activities.
KB Home (KBH) posted a narrower-than-expected loss of 75 cents per share in the first quarter thanks to fewer write-downs. While the home builder said net orders rose 26%, it said it sees “no meaningful improvement in market conditions” for the rest of the year.
Amazon.com (AMZN) plans to shut distribution centers in three states and lay off or transfer about 210 workers to balance out its operations, the Journal reported.
Data Dump
The government said personal spending increased 0.2% in February, the second-straight monthly increase. The rise in spending, which was mostly expected, comes even as personal incomes tumbled 0.2% in February due to mass layoffs.
The Reuters/University of Michigan consumer sentiment index improved to a 57.3 reading in March from 56.3 in February.
Global Markets
European indexes joined the slump in the U.S. as London's FTSE 100 slipped 0.67% to 3898.85, Germany's DAXtumbled 1.31%to to 4203.55 and France's CAC 40 sank 1.78% to 2840.62.
In Asia, Tokyo's Nikkei 225 fell 0.11% to 8626.97 while Hong Kong's Hang Seng gained 0.07% to 14119.50. China's Shanghai Composite rallied 0.54% to 2374.44.
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