Wall Street drops, posts worst week since August

Wall Street fell sharply on Friday and capped off its worst week since the dark days of August, hurt by a selloff in technology companies, while department stores dropped on concerns about the upcoming holiday shopping season.

After the bell, U.S. stock index futures hit session lows in light volume, with market participants citing concerns over reports of deadly attacks in Paris.

“The geopolitical aspect is always out there, and anything that brings that back into the headlines will pull the buy orders fairly quickly,” said Alan Lancz, president, Alan B. Lancz & Associates Inc, a Toledo, Ohio-based investment advisory firm.

The three major U.S. indexes ended the week down more than 3 percent, firmly putting the brakes on a fast rally that began in October.

Dow component Cisco (CSCO.O) dropped 5.8 percent after it gave a flimsy forecast, citing a slowdown in orders and weak spending outside the United States.

It was the second-biggest drag on the S&P 500 and the Nasdaq, weighing on shares of tech heavyweights, including Apple (AAPL.O) and Facebook (FB.O).

Retailers were hit by disappointing reports from department store chains. Nordstrom (JWN.N) lowered its full-year forecast on Thursday, spooking investors already on edge after Macy’s (M.N) cut its forecast on Wednesday.

In addition, data showed U.S. retail sales rose less than expected in October, suggesting a slowdown in consumer spending.

Consumer stocks have been a bright spot this year as weak commodity prices, fears of a global slowdown and anticipation of a U.S. rate hike have hit most stocks, especially those of materials, energy and industrial companies.

The S&P 600 smallcap index .SPCY lost 4.6 percent for the week, its worst weekly performance in over three years.

The underperformance of smallcaps relative to larger companies in recent weeks hints at vulnerability in the broader market, said Alan Gayle, senior investment strategist at RidgeWorth Investments in Atlanta, which has $50 billion in assets under management.

“The market got to up within about a percent of its previous record high. It got overbought, but we really didn’t get the follow-through we wanted from the small caps,” Gayle said.

The Dow Jones industrial average .DJI fell 1.16 percent to finish at 17,245.24 points and the S&P 500 .SPX lost 1.12 percent to 2,023.04. The Nasdaq Composite .IXIC dropped 1.54 percent to 4,927.88.

Source : Reuters