U.S. Stock Fall After Biggest Weekly Loss Since 2012

NEW YORK (AP) — U.S. stocks are falling in midday trading Monday following the market's biggest weekly loss in two and a half years as oil continues a six-month slide. European stocks are dropping sharply. The Russian ruble has hit a record low against the dollar.

 

KEEPING SCORE: The Standard & Poor's 500 index fell 11 points, or 0.6 percent, to 1,991 as of 12:16 p.m. Eastern. The Dow Jones industrial average dropped 98 points, or 0.6 percent, to 17,182. The Nasdaq composite fell 42 points, or 0.9 percent, to 4,612.

 

OIL: The price of oil dropped, erasing an early gain. Benchmark U.S. crude fell $1.33, or 2.3 percent, to $56.46 a barrel on the New York Mercantile Exchange. Oil has fallen by about half since June on waning global demand and abundant supplies. The recent drop to five-year lows has been roiling stock markets.

 

RUSSIA'S PAIN: The ruble plunged 11 percent to 64.67 to the dollar. The ruble started the year at 32.85 to the dollar. The falling price of oil, which is the chief source of Russian exports and tax revenue, has weighed heavily on the currency.

 

EUROPE DROP: After mixed trading earlier in the day, all main European indexes dropped sharply. France's CAC 40 lost 2.5 percent and Germany's DAX fell 2.7 percent. Britain's FTSE 100 was down 1.9 percent.

 

THE QUOTE: "What you're seeing is a correction that's long overdue, and now we finally have an excuse: free-falling fuel prices," said Uri Landesman, president of Platinum Partners, an investment fund in New York. "People are taking profits, and it can go on for a while."

 

BUYOUT BOUNCE: Riverbed Technology and PetSmart are soaring on news that they agreed to be bought. Riverbed, a maker of computer-network equipment, jumped $1.61, or 9 percent, to $20.35 after agreeing to a $3.6 billion sale to private-equity firm Thoma Bravo and a Canadian pension fund. Pet-supplies chain PetSmart rose $3.26, or 4.3 percent, to $80.92 after announcing Sunday that it had agreed to an $8.7 billion sale to a group of investors led by BC Partners.

 

FACTORY FIX: U.S. manufacturing output in November surpassed its pre-recession peak as auto production ramped up. The Federal Reserve figures are an encouraging sign that America's factories are somewhat insulated from the global economic slowdown.

 

JAPAN ELECTIONS: Japan's ruling coalition won in lower house elections Sunday, giving Prime Minister Shinzo Abe's Liberal Democrats up to four more years. However a business survey released Monday highlighted the challenges facing Abe's government, which is using large-scale monetary and fiscal stimulus to try to end two decades of stagnation. More than two-thirds of companies surveyed said the outlook for the coming quarter wasn't favorable.

 

ASIAN SCORECARD: Japan's Nikkei closed down 1.6 percent. Hong Kong's Hang Seng dropped 1 percent and Seoul's Kospi shed 0.1 percent. Australia's S&P/ASX 200 dropped 0.6 percent. China's Shanghai Composite reversed losses to close up 0.5 percent.

 

BONDS: Prices for U.S. government bonds fell. The yield on the 10-year Treasury note rose to 2.09 percent from 2.08 percent late Friday.

         – by AP Reporter Bernard Condon

 

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