NEW YORK – Stocks closed broadly lower for a third straight week on signs that US consumer demand may be weakening. The Dow Jones industrial average fell 93.28 points, or 0.7 per cent, to 12,512.04. The Standard & Poor's 500 index lost 10.33, or 0.8 per cent, to 1,333.27. The Nasdaq composite dropped 19.99, or 0.7 per cent, to 2,803.32. Each market index fell by more than 0.3 per cent for the week. The Nasdaq lost the most, 0.9 per cent. Stock indexes have been staying within a relatively small range since a May 4 plunge triggered by a sharp drop in oil prices. The Dow fell more than 200 points in two days. After several weeks of waffling, the index is trading slightly above where it was after that two-day fall.
May is traditionally a weak month for the stock market. Traders have little to base buying and selling decisions on with corporate earnings season officially over and economic news scarce. Trading has been relatively light. A stronger US dollar has also hurt stocks. The dollar rose against the euro Friday after the Fitch ratings agency downgraded Greece's debt three notches further into junk status, escalating worries about the European debt crisis. In recent months, markets have fallen when the dollar rises against the euro because the stronger US currency has signaled that European countries are still struggling to get their debt under control.
"A stronger dollar and a stronger U.S. market can coincide, but not when the US economic data are weak," said Quincy Krosby, chief market strategist for Prudential Financial. "This has been a stronger dollar that has come because of another currency weakening, not a stronger US economy." Concerns about the strength of the economy pushed government bond prices higher as investors sought out safer assets. The yield on the benchmark ten-year Treasury note fell to 3.15 per cent from 3.18 per cent late Thursday. Bond yields fall when their prices rise.