© Westhavenmanagement.comNew York Stock Exchange
The Dow industrials took their biggest daily tumble in more than seven months Friday, caught up in a two-day selloff in emerging-market stocks and currencies.
Traders said that despite the scope of the decline, fund managers weren't overly urgent in selling. Rather, they pointed to short-term players selling baskets of stocks, such as index futures or exchange-traded funds, as a way to protect against losses elsewhere in their portfolios. Buyers, meanwhile, pulled to the sidelines, content to wait before putting money to work.
The Dow Jones Industrial Average slid 318.24 points, or 2%, to 15879.11, a five-week low. For the week, the benchmark fell 3.5%.
The S&P 500 index dropped 38.17 points, or 2.1%, to 1790.29. The Nasdaq Composite Index shed 90.70 points, or 2.2%, to 4128.17.
"There's a lack of buyers supporting the market and incremental sellers who are de-risking on the back of the macro developments," said Doug Crofton, head of U.S. cash equity trading at Bank of America Merrill Lynch. "I don't think the market was positioned for the recent events."
"We're not seeing people throw in the towel," or selling indiscriminately in a rush to get out of the market, he added.
Even with Friday's declines, the S&P 500 is up 20% from a year ago and 3% off its Jan. 15 all-time closing high.
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