US stocks retreat on recession fears

NEW YORK: Recession fears sent US stocks down again Friday, with last-hour selling pushing the Dow Jones Industrial Average to a 1.57 per cent loss for the day.

The Dow fell 172.93 points to close at 10,817.65. The broader S&P 500 lost 17.12 points (1.50 per cent) to 1,123.53, while the tech-heavy Nasdaq dropped 38.59 points (1.62 per cent) to 2,341.84.

Concerns about faltering US economic growth and the eurozone's debt crisis have wiped more than US$7 trillion in value from global stock markets since late July.

"It's just a continuation of the fear factor. It's Friday, with no economic news, the market traders are continuing to sell," said Peter Cardillo, chief market economist with Rockwell Global Capital.

JPMorgan Chase cut its growth forecasts for the United States, slashing its estimate of fourth-quarter US gross domestic product growth from 2.5 per cent to 1.0 per cent.

"The risks of a recession are clearly elevated," the bank said, although it stopped short of predicting that the US economy would contract.

Shares of tech giant Hewlett-Packard plunged 20.0 per cent, weighing down the Dow's average of 30 blue-chip stocks.

The steep losses came a day a day after HP lowered its projected earnings for 2011, announced that it was exploring a spin-off of its PC business and said it would acquire British software firm Autonomy for $10.24 billion.

Financial stocks fared poorly amid the global uncertainty, with Citigroup sliding 4.3 per cent. Bank of America slipped 0.6 per cent after confirming it would cut about 3,500 jobs by the end of September.

Gold, a traditional safe haven in times of financial turmoil, surged to a new record high of US$1,878.15 per ounce. -- AFP