From Briefing.com: 4:15 pm : Sellers reclaimed control of the stock market after it had put together solid back-to-back gains. The change in tone came amid renewed concerns about contagion in Europe and disappointing nonfarm payrolls data.
Stocks entered Friday with a weekly gain of more than 1%, but that was dashed with this session's rout, which saw the S&P 500 drop more than 3%. That gave the stock market a weekly loss of more than 2% -- its fourth weekly loss of more than 1% in six weeks.
Market participants sold stocks en masse upon learning that officials from Hungary stated that economic conditions in their country are grave and that talk of default is not an exaggeration. What's more, the country does not plan to put austerity measures in place, leading many wonder whether the European Union (EU) will have to provide a bailout.
Though Hungary uses the forint instead of the euro as its currency, the country's troubles make for a manifestation of the fears spawned by the tenuous fiscal and financial conditions throughout Europe. In turn, the euro dropped a precipitous 1.7% to set a new four-year low of $1.1956.
Trade was also hurt by news that nonfarm payrolls for May increased by 431,000, which is well below the 500,000 that many had expected. Even higher numbers had been whispered in some circles, making disappointment over the number all the more significant. Ultimately, the smaller-than-expected increase in payrolls overshadowed news that the unemployment rate made a surprise move to 9.7% from 9.8%.
There really weren't any other headlines to act as catalysts for trade. In turn, market participants were focused on the negative. Of the 500 components in the S&P 500, only one -- Cephalon (CEPH 59.11, +0.33) -- managed to muster a gain. Weakness in the rest of the market led the benchmark index to one of its worst performances this year and its lowest close since February.
Such sharp selling pressure caused the Volatility Index, often euphemistically dubbed the "Fear Gauge," to surge more than 20%. It closed at its highest level of the week.
There was plenty participation behind this session's selloff. Specifically, trading volume on the NYSE surpassed 1.6 billion shares, which is comfortably above the 50-day average of roughly 1.4 billion shares. This session's declining volume outnumbered advancing volume by more than 130-to-1.
Amid this session's carnage, Treasuries fared extremely well. As such, the benchmark 10-year Note spiked more than one point to drop its yield is below 3.20%.
Gold was also a beneficiary of a flight to safety. It closed pit trade with a 0.6% gain at $1217.20 per ounce.
Gold wasn't the only commodity to find favor, though. Natural gas prices climbed 2.3% to settle pit trade at $4.82 per MMBtu as the energy component extended its surge from the prior session.
Advancing Sectors: (None)
Declining Sectors: Industrials (-4.6%), Financials (-4.0%), Materials (-3.9%), Consumer Discretionary (-3.8%), Energy (-3.5%), Tech (-3.2%), Utilities (-3.0%), Health Care (-3.0%), Consumer Staples (-2.6%), Telecom (-2.3%) DJ30 -324.06 NASDAQ -83.86 NQ100 -3.4% R2K -5.0% SP400 -4.1% SP500 -37.95 NASDAQ Adv/Vol/Dec 300/2.30 bln/2372 NYSE Adv/Vol/Dec 289/1.63 bln/2790
Xilinix (XLNX) prices $520 mln of 2.625% convertible senior notes due in June 2017.
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