Stocks sold off in volatile trading Friday as an encouraging jobs report fell to the back burner and the market remained jittery after Thursday's nauseating freefall.
The Dow ended down 139.89, or 1.3 percent, to close at 10,380.43. For the week, the Dow lost 630 points, or 5.7 percent, its worst weekly percentage drop since last March.
The Nasdaqlost 2.3 percent today, falling into correction territory: The tech-heavy index is now down more than 10 percent from its April 23 high.
All three major indexes are now lower for the year as investors worry about another shoe to drop as the European debt crisis worsens.
The CBOE volatility index, widely considered the best gauge of fear in the market, was above 41, nearly double of where it ended last week, at the closing bell.
Oil fell 13 percent this week to settle at $75.11, its worst week since December 2008. Gold closed out the week at $1,210, a new 2010 high, as investors flocked to the metal as a safe-haven play amid the market madness.
More than 2.4 billion shares changed hands on the New York Stocks Exchange, twice the daily average for a second straight day. More than 2 million of those were decliners.
Despite an encouraging sign on the jobs front — nonfarm payrolls jumped by 290,000 in April, the fastest pace in four years — investors unwound their recovery plays, selling off technology, industrial and consumer-discretionary stocks.
For the week, materials, industrials and energy were the worst performers.
Selling in techs accelerated today following news that Nokiais suing Apple over patent infringements.
Financials had started the day higher but ended sharply lower as investors tried to make sense of what happened yesterday and what it means going forward.
The market had been plodding along Thursday, worried about Greece and the spread of the European debt crisis. But as market pros were debating if this was the beginning of a correction, the riots in Greece exploded on live television and the bottom fell out of the market. Stocks went into a freefall, with the Dow down as much as 998.50 at one point, before recovering to end down just 350 points.
Investigators still don't know exactly what happened but today's buzz suggests computers were likely to blame— not human error.
One theory Thursday suggested a trader at Citigroupmay have mistyped a trade as billioninstead of million, triggering all kinds of computerized trades that are programmed to sell when a stock hits a certain level. But Citigroup said there was no basis to such rumors.
Some say the selloff was exacerbated by high-frequency tradersas several high-frequency trading firms stopped trading when the market was going haywire.
It's times like this that separate the men from the boys — and who needs to get back on the porch — and market veteran Art Hogan of Jefferies said he sees a buying opportunity.
"Last week, if you look at the 50-day moving average of the S&P — 93% of companies were trading above their 50-day moving average. But coming in this morning, that's only 28%. In the last June/July selloff, that bottomed out at 25%, so we’re getting a very strong buy signalin valuations and the multiples are very, very attractive," Hogan said on CNBC this morning.
Looking for "buys" amid this week's market carnage? Click on the Market Outlook video at left.
Among the stocks that showed highly unusual trading in Thursday's selloff were Procter and Gamble, Accenture, 3M and Altria (Philip Morris) .
There are systems in place to slow — and even halt — trading when selloffs accelerate too fast on the New York Stock Exchange but as those slowdowns began, traders took advantage of the global trading system and went to other exchanges to place their orders.
The NYSE and Nasdaq engaged in a high-stakes blame game on CNBC this morning.
"Our systems function flawlessly," said Nasdaq CEO Bob Greifeld, citing the fact that Nasdaq-listed stocks Microsoft, Intel and Cisco had modest drops, while NYSE stocks like P&G and Accenture fell off the rails.
"We provided continuous market support for that period of time. The stocks over the NYSE did not enjoy that luxury," Greifeld said. The NYSE "basically walked away from the stock.
Well-known investor Jim Rogers piled on: "Somebody should hang this New York Stock Exchange!" Rogers said. "They claim to be the center of the world's capitalism, of the world's financial markets, you would think that in 2010 they could sort out simple things like electronics."
NYSE CEO Duncan Niederauer shot back that the cause of Thursday’s market meltdown was electronic trading, not a “fat finger” — the term some are using to describe a possible trader typo that placed a trade for "billions" instead of "millions."
“Let’s stop the fingerpointing and move the ball forward," Niederauer said. "We’re not walking away from this but let’s be constructive.”
The NYSE and Nasdaq decided to cancel all trades executed 60 percent away from the market from 2:40pm ET to 3:00pm ET. The Nasdaq made public the list of trades cancelled.
And a congressional panel will probe Thursday's stunning selloff at a hearing next Tuesday.
Goldman Sachs shares rose amid a lively annual shareholder meeting: While CEO Lloyd Blankfein vowed to conduct a "comprehensive review of all of our business practices," shareholders gave him a flogging.
"Goldman Sachs has become a nest of nepotism," said famous shareholder-meeting character Evelyn Davies, berating Blankfein for hiring his two sons.
"If Hank [Paulson] had been here this would never have happened!" she charged.
"Lloyd, I demand you step down by Monday or I will have board remove you!" she said.
Germany approved a rescue package for Greece but investors remained worried about the spread of the crisis, with economist Nouriel Roubini saying the crisis could spread to the U.S. and Japan.
The dollar rose against the euro.
The pound plunged against the dollar and UK stocks were lower as early results from Thursday's election pointed to a hung Parliament, with neither the opposition Conservatives nor the ruling Labor party getting a clear majority.
European stocks fell more than 2 percentas the U.S. selloff reverberated into markets there, already rattled by the debt crisis. Asian stocks also skidded, with Japan's Nikkei down more than 3 percent.
Treasury Secretary Tim Geithner is to hold a conference call with other G7 Finance ministers on the Greek and market situation, although little action is expected, CNBC has learned Thursday.
Alcoa was at the top of the Dow pack after BMO Capital upgraded the stock to "outperform" from "market perform."
BP shares fell as engineers lowered a containment box toward a gushing oil well on the Gulf of Mexico seabed aimed to contain a leak that threatens an environmental catastrophe on U.S. shores.
AIG advanced after the bailed-out insurer posted a profit. The firm got a boost from its investments and general insurance operations appeared to stabilize.
Berkshire Hathaway is slated to report earnings after the bell today.
General Growth Properties shares skidded after Simon Properties withdrew its bid to acquire its rival mall operator.
On Tap for Next Week:
MONDAY: BOE announcement; Fed's Hoenig, Kocherlakota speak; earnings from Dish Networks, Tyson Foods and Priceline
TUESDAY: Intel shareholder meeting; wholesale trade; Congressional hearing on market's freefall; Fed's Rosengren, Lockhart speak; 3-year auction; earnings from Toyota
WEDNESDAY: Weekly mortgage applications; trade balance; weekly crude inventories; 10-year auction; Fed's Bullard speaks; earnings from Macy's
THURSDAY: Ford, Google shareholder meetings; weekly jobless claims; import/export prices; Fed's Kocherlakota speaks; 30-year auction; earnings from Kohl's, Nordstrom, Nvidia
FRIDAY: Government's retail-sales report; industrial production; consumer sentiment; business inventories; earnings from JC Penney
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